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Airlines Not Grounded by Stormy Economic Climate

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Flights between the EU and the US represent almost 20% of global air travel. (Image: Svilen Milev)
Flights between the EU and the US represent almost 20% of global air travel. (Image: Svilen Milev)

BUSINESS

  • United Continental lashes out $550 million to revamp aircrafts
  • Qantas to invest $9 billion and open two new airlines in Asia
  • Australian aviation market to lose 1,000 jobs

Undeterred by the economic crisis, major airlines are ploughing ahead with major investments. While many players in the aviation industry have faced challenges due to steep oil prices and falling numbers of passengers throughout the economic downturn, some airlines are tackling the vagaries of the tough climate head on through bold investments.

United Continental is to spend $550 million on modernizing its planes. Passengers are set to enjoy greater comfort with the airline planning to install Economy Plus seating on its mainline airplanes, affording up to five inches of supplementary leg room on seats situated near the front of the aircraft, facilitating quick exit after landing.

Boeing 777s and Boeing 767s will have flat-bed seats installed. Overhead storage will also be increased on its airbusA319 and A320 airplanes.

Apart from new seats and increased storage, much of the investment will go to providing passengers with greater in-flight entertainment. The upgrade will grant travelers on-demand audio and video programming, and install iPod connection ports for some.

About 12 of the company’s Boeing 777s are to see their in-flight entertainment system upgraded while its Boeing 747s will be equipped to grant passengers the possibility to watch films on personal devices such as laptops, smartphones and tablets.

Qantas Moves to Meet Demand in Asia

Qantas Airways, equally undeterred by the unfavorable economic climate, is to try its luck in Asia where it will introduce two airlines. The move will see 1,000 job cuts in Australia and $9 billion spent in acquiring new Airbus aircraft as Qantas seeks fairer weather with a premium Asian airline and teams up with Mitsubishi Corp and Japan Airlines to launch a budget carrier in Japan.

The airline’s chief executive Alan Joyce noted that there is a falling off in the number of Qantas passengers: “Right now 82 out of every 100 people flying out of Australia are choosing to fly with an airline other than Qantas, not including Jetstar,” quotes Reuters.

The airline’s venture into the Asian aviation market is a bold move that could mean the rallying or failure of Qantas.

Key Statistics – Global Air Travel (source IATA)

  • There was an almost 6.5% increase in premium travel and an under 5% rise in economy travel year-on-year to June.
  • Flights between the EU and the US represent almost 20% of global air travel and account for 30% of the world’s aviation industry revenue.
  • Traffic between the EU and the Far East represents the world’s second-largest market. This segment saw nearly 8% growth in June, an inferior rate of growth of over 12% in the first half of 2011.
  • The first half of 2011 showed more than 11% growth in premium traffic on last year.
  • Premium traffic in June was up almost 6.5% from June 2010.
  • Economy travel has seen a 4% increase in the number of travelers on its pre-crisis peak.

By Ellsy O'Neill for
Ellsy O'Neill is a Paris-based writer, proofreader and translator. She covers industry, culture and current affairs.

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