Main News July 6 2012


Screening investment perhaps not enough

New analysis from Frost & Sullivan on the US airport screening technologies market has found that during 2011, the TSA spent approximately US$437.1m in contract obligations toward airport screening technologies.

The Transportation Security Agency is responsible for preventing knives, guns and other weapons from being taken on board aircraft. Despite these precautions, more than 800 guns were detected on board aircraft last year. These findings have highlighted the need for more stringent screening methods.



Facing up to the question of CO2

ICAO has said that it will focus on three options in addressing greenhouse gas emissions. To achieve this, it will look to eliminate the baseline and credit system, which allowed the trade in baseline increases or decreases.

It was felt that this initiative was broadly similar in scope to global carbon offsetting and as such, represented unnecessary duplication. Remaining options include offsets (with a revenue-generating mechanism) and the tried and trusted cap and trade scheme.

There is ongoing resistance from the US and China (and some other countries) towards the EU’s emissions trading scheme, which has put the International Civil Aviation Organization under pressure to come up with a workable alternative.

ICAO’s Secretary General, Raymond Benjamin, has said that he expected the council to have a draft plan in place by March 2013, effectively extending the proposed 2012 deadline that had been anticipated. But coming up with a scheme that will be acceptable to all of the organization’s airlines, that number close on 200, could well prove elusive.

And so the debate over permit purchase for flights into and out of Europe continues, with no obvious solution on the horizon.



Growth on the cards at BBA

BBA Aviation has committed to a seven-year lease extension and expansion of its Orlando corporate headquarters offices to accommodate anticipated growth.

Signature Flight Support and ASIG, together with their parent company BBA Aviation, collectively have more than 1,000 employees in 12 Florida cities, with almost 200 based in Orlando. The expansion will support the future anticipated growth of the business and the creation of new, high-earning jobs over the course of the next three years.

“We are delighted to commit to our ongoing presence in Orlando.” commented S Michael Scheeringa, President Signature Flight Support and member of BBA Aviation’s Executive Committee. “We found the partnership with both the state and city to be conducive to both retention and growth.”



LAN acquisition goes through

History was made on June 22, when Chile’s LAN Airlines completed a takeover of Brazilian rival TAM, thereby creating the world’s second-largest airline by market value, in a deal that analysts confidently predict will yield up to US$700m in annual cost savings within a period of four years.

It hasn’t gone unnoticed that the new carrier, called LATAM Airlines Group, will be flying into the teeth of a recession: indeed, currently there is a slow-down in economic growth and demand for air travel in Brazil. But those significant cost savings could save the day. The airline will be focussing on improving performance in Brazil and it is hoped that during the merger, there will be little in the way of redundancies.



Volaris fined for misleading website

Recently, the US Department of Transportation fined Volaris US$130,000 for failing to disclose to consumers that they might have to pay baggage fees when buying a ticket.
“We adopted our rule on baggage fees to make sure that consumers have complete and accurate information about how much they will have to pay when they book a flight,” confirmed the US Transportation Secretary. “We will continue to take enforcement action when carriers fail to comply with our rules.”
According to the DOT’s latest regulations, carriers must clearly and prominently disclose on the first PC window that offers a fare for a customer’s itinerary whether or not additional fees for baggage may apply. Moreover, it is obliged to direct travelers to where they can view applicable baggage fees. This regulation applies to all airlines selling air transportation in the US, including foreign carriers.



Oiling the wheels – but not everybody’s

Delta Air Lines, which in a recent, well-publicized report decided to buy an oil refinery in an attempt to gain more control over its aviation fuel costs, has stated that it will not be selling jet fuel on the open market.

The carrier’s subsidiary, Monroe Energy, is to invest some USD$100m to convert the 185,000 barrels per day refinery in Pennsylvania in an attempt to increase its jet fuel output to 52,000 barrels per day, which represents about 32% of its output. Monroe Energy, which has been specifically set up to own the refinery, will then sell the fuel back to Delta.