Airlines? pain continues

AirlinesÆ pain continues       Freight and passenger demand on international airlines has slightly improved in recent months, but is still depressed since last year, according to the International Air Transport Association.
      Freight volume fell 9.6 percent in August, but that was an improvement from the 11.3 percent drop in July. Compared to the December 2008 low, seasonally adjusted freight demand has improved 12 percent, but is still 16 percent below volumes in April 2008, when the fall in demand began.
      On the passenger side, demand declined 1.1 percent in August compared to a 2.9 percent drop in July. Compared to the low point of March 2009, seasonally adjusted passenger demand has improved 6 percent, but traffic levels remain 5 percent below May 2008.
      Airlines have sidelined aircraft to reduce operating costs and increase utilization, but average fares are still about 20 percent off levels in mid-2008, the industry organization said.
      'Demand continues to improve but profitability remains ever distant,' Giovanni Bisignani, IATA's director general, said in a Sept. 29 statement. 'Fares have stabilized, but at profitless levels. Meanwhile, cost pressures are mounting from reduced aircraft utilization and rising oil prices. The industry is not out of the woods yet.'
      Bisignani repeated calls for governments to loosen aviation rules and allow cross-border investment and mergers of airlines.
      IATA estimates that airlines will lose $11 billion this year and $3.8 billion in 2010. It doesn't anticipate a return to profitability until 2011.
      In related news, Malaysian Airlines said it will accept its order of six Airbus A380 superjumbo jets because it anticipates global travel will increase by late next year. Airbus is scheduled to deliver the planes in 2011.
      The airline is also taking delivery of 35 Boeing 737-800s beginning in the fourth quarter of 2010 to replace its existing narrow-body regional fleet.
      Managing Director Tengku Azmil Zahruddin said Malaysian Airlines is also studying plans to buy a new fleet of widebody aircraft to meet future growth, but no decision has been made, the Associated Press said.
      Many airlines have canceled or delayed orders to preserve cash or don't believe they can fill the planes in the near future.
      Malaysian returned to profitability in the second quarter because of positive gains in some investments, but still recorded an operating loss.

IATA issues carbon reduction plan
      The International Air Transport Association urged the United Nations in September to establish global standards for addressing aviation's impact on climate change, saying the uncoordinated number of regulations from individual countries is too cumbersome.
      The International Civil Aviation Organization is best placed to manage aviation sector compliance with environmental rules, it said.
      The airline industry issued a proposal setting targets for reducing greenhouse gas emissions. The organization said the industry planned to improve fuel efficiency 1.5 percent each year through 2020, stabilize emissions with carbon-neutral growth after 2020, and cut emissions in half by 2050 from 2005 levels.
      The proposal was issued in advance of the December U.N. Framework Convention on Climate Change meeting in Copenhagen, Denmark.
      'Mechanisms designed for ground-based polluters will not work effectively for aviation which can emit CO2 across borders and over the high seas even on a single flight. And already uncoordinated national and regional schemes are creating a patchwork of punitive taxes that fill government coffers, but do little or nothing to effectively manage aviation's emissions,' said IATA Director General Giovanni Bisignani.
      IATA said use of more optimal routes and technology have already had a positive impact on pollution. Aviation emissions are expected to decrease 7 percent in 2009 ' 5 percent as a result of the recession and 2 percent from environmental initiatives implemented by airlines.
      The U.S. and European governments need to speed up deployment of modern air traffic control systems that will allow planes to fly in closer proximity and more direct routes, reducing emissions in the process, IATA said. Governments can also do their part by creating the legal and economic framework to support the development of sustainable biofuels for aviation, it added.

AirBridge expands to Kazakhstan
      AirBridge Cargo Airlines began weekly Boeing 747 service to Almaty, Kazakhstan, from Amsterdam on Oct. 5. The route operates via Sheremetyevo Airport in Moscow.
      The scheduled airline, part of the Volga Dnepr Group, is responding to demand from forwarders for transport options in Kazakhstan. It said the flights are expected to carry a range of shipments, including luxury goods from France, Germany, Belgium and the Netherlands.
      AirBridge Cargo has expanded its network even during the recession. It also opened a new route from Maastricht in the Netherlands to Moscow and increased it to twice weekly. Routes to Milan, Italy; Kabul, Afghanistan; and Zaragoza, Spain, have also been recently launched. The Netherlands is now served by eight flights per week, all connecting to Russia and Central Asia.

UPS tests new advertising channel
      Marketers have a new tool at their disposal for reaching consumers in their homes that doesn't require carpet-bombing cities with third-class junk mail or e-mail that isn't read. UPS is offering a more targeted advertising option in which its drivers will deliver along with a residential package a small cardboard envelope with offers, samples and coupons from name-brand retailers.
      The world's largest package delivery company began the pilot program in late September in five cities: Washington, Chicago, Dallas-Fort Worth, Miami and Phoenix.
      The Atlanta-based company characterizes its Direct-to-Door service as a way for premium retailers to reach customers in test ZIP codes. The personalized delivery is intended to make the messages inside stand out. UPS says Direct-to-Door is a more cost-effective way for marketers to reach their target audience.
      Participating retailers include Williams Sonoma; Bed, Bath and Beyond; Boca Java; Zappos.com; Sephora; Newegg.com; and West Elm.
      Shortly after receiving my UPS press release by e-mail, the door bell rang and there was my UPS driver with a package and my little advertising pack.
      Maybe those $1 Johnson & Johnson coupons for Band-Aid, Purell and Neosporin will come in handy someday.