Virgin Australia signs new six-year deal with Gate Gourmet

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A Gate Gourmet truck servicing a Virgin Australia Boeing 737-800. (Gate Gourmet)

Gate Gourmet will become the “sole service provider” for Virgin Australia’s 450 daily domestic and international flights from June under a new six-year deal.

The catering company, owned by gategroup, already provides meals and handling for Virgin Australia at a number of ports and the new long-term contract would expand the portfolio of work by about 40 per cent, the two companies said in a joint statement.

It would also result in 100 jobs being created at gategroup around Australia.

Virgin Australia group executive for airlines Rob Sharp said the partnership would “enable us to take our inflight dining experience to new heights”.

“We are in the process of transforming the Virgin Australia food and beverage offering and today’s announcement will enable us to bring benefits to our guests more quickly,” Sharp said in a statement.

“gategroup has been an excellent partner of ours for a number of years and we look forward to working with them more closely to provide the world’s most rewarding travel experience.”

Virgin Australia head chef Luke Mangan would continue to work closely with Gate Gourmet.

gategroup chief executive Xavier Rossinyol said it was an exciting evolution of the partnership with Australia’s second largest carrier.

“gategroup’s ongoing relationship with Virgin Australia further strengthens its position as a leading airline caterer in Oceania region, leveraging our commercial and retail innovations,” Rossinyol said.

“It’s an exciting time for the industry and for pushing boundaries on what inflight meals and services can be.”

Virgin Australia is due to publish its 2017/18 first half results on February 28 2018.

HNA Group purchased the Switzerland-headquartered gategroup for 1.5 billion Swiss francs (A$2 billion) in 2016, part of a $50 billion worth of acquisitions over a two-year period.

As a consequence, the Chinese conglomerate has built up strategic investments in airlines, aircraft leasing, cargo, financial services, ground handling, hotels and travel businesses. It is a major shareholder in Virgin Australia and has a seat on the board.

Media reports in December 2017 indicated HNA was looking to float gategroup some time in 2018 through an initial public offering.

The move to sell off some assets comes amid speculation the company was facing liquidity concerns and a lack of willingness among some banks to support its recent debt-fuelled buying spree.

(The January/February 2017 edition of Australian Aviation included an in-depth look at Gate Gourmet’s Sydney operations. Back issues are available here.)

 

Source :  Australian Aviation

Super Hornet & Growler to get longer legs as US Navy funds conformal tanks

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The combat effectiveness of the RAAF’s Super Hornets and Growlers could be the beneficiary of a US Navy decision to fund the development of range-extending conformal fuel tanks.

Last week the US Navy awarded Boeing a US$219.6 million contract to develop the conformal fuel tanks – or CFTs – for the Super Hornet airframe, covering the “design, development, test and integration” of the conformal fuel tank.

However, it would be some years before US Navy and, potentially, RAAF Super Hornets and Growlers could benefit from the capability enhancer, as the work is not expected to be completed until mid-2022.

Boeing first proposed shoulder-mounted conformal fuel tanks for the Super Hornet as one of a number of upgrades for the jet, as part of what it would later call the Advanced Super Hornet, at the 2010 Farnborough Airshow. It then flew a Super Hornet demonstrator fitted with aerodynamic mockups of the tanks, along with other Advanced Super Hornet improvements, in 2013.

That testing validated the aerodynamic performance of the design and showed that CFTs would increase the Super Hornet’s combat radius by up to 130nm, for a total combat radius of more than 700nm.

The tanks have a combined fuel capacity of 1,600kg (3,500lb), do not increase the aircraft’s subsonic drag, and increase transonic drag only equivalent to carrying an external centreline tank. With some internal fuel system plumbing changes the CFTs were designed to be retrofittable to existing aircraft.

The US Navy added conformal fuel tanks to its ‘road map’ for the EA-18G Growler, which shares the same basic airframe as the F/A-18E/F Super Hornet, in 2015.

Conformal fuel tanks on the Growler would free up underwing stations, reduce drag compared to carrying underwing external fuel tanks, and improve the ‘field of regard’ for the aircraft’s ALQ-99 jammer pods (as underwing tanks can partially block their line of sight).

It is thought likely that the RAAF would acquire CFTs for its fleet of EA-18G Growlers (reduced to 11 aircraft following a recent engine failure on takeoff incident) should the US Navy fund their development. The 2016 Defence Integrated Investment Program roadmap of defence capability spending provides for some $5-6 billion in funding for upgrades to the Growler over the next decades.

Source :  Australian Aviation

Alliance Airlines says more resources activity to lead to increased flying hours

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Alliance Airlines expects to increase total flying hours by almost 40 per cent in 2017/18 amid increased activity in the resources sector and its growing regular public transport (RPT) and wet lease operations.

The company said in its 2017/18 first half results it expected to reach 35,000 flight hours for the full year. The figure represented a 39 per cent jump from 25,117 total flight hours in the previous financial year.

It said the resources sector continued to improve.

“The business has seen a substantial increase in activity over the last six months and this is expected to continue,” Alliance managing director Scott McMillan said in a statement.

“The investment made in both fleet units and associated resources puts Alliance in a strong position to capitalise on additional capacity requests from existing and prospective clients.”

In recent years, Alliance has made significant strides in broadening its operations from fly-in/fly-out (FIFO) work to boost revenue in areas such as tourism, aircraft sales, wet and dry leasing and spare parts sales.

In 2017, the airline commenced RPT flights from Brisbane to Bundaberg, Gladstone and Port Macquarie with Fokker 70 regional jets which are sold as Virgin Australia codeshare services. Alliance said the routes were performing as expected.

Meanwhile, Alliance and Virgin Australia received Australian Competition and Consumer Commission (ACCC) approval in May 2017 to work together in the charter and (FIFO) market, allowing for the joint tendering for corporate FIFO contracts, as well as cooperating on aircraft maintenance, procurement of aircraft and parts, parts pooling, airport operations, airport handling, check-in, frequent flyer programs, lounge access, scheduling, pricing, sales and marketing and service policies.

And from March Alliance will operate three Newcastle-Adelaide nonstop flights a week on behalf of FlyPelican.

Another example includes a four-year contract to operate aircraft in Australia and New Zealand for US-based tour operator Tauck signed in 2015.

Total flying hours for the 2017/18 first half rose 34 per cent to 16,207 hours, compared with the prior corresponding period, Alliance said. Wet lease hours rose by 105 per cent, while RPT hours jumped 137 per cent.

Total revenue increased 16 per cent to $117.5 million.

“This increase is attributable to increased flying hours across all revenue streams,” Alliance said.

“Contract hours reflect incremental flying activity increases across a broad range of resource clients and the charter market has seen steady activity over the half year.”

Further, Alliance said charter revenue exceeded expectations in the first half.

Its contract flying represented 65 per cent of total revenue in the first half, down from 69 per cent in the prior year.

The increased flying has also led to an expansion of the fleet to 31 aircraft at December 31 2017, compared with 28 aircraft a year ago. Alliance, which is the world’s largest operator of Fokker aircraft with both the Fokker 70 and Fokker 100 in the fleet, said a further three aircraft would be introduced between now and June 30 2017.

“These aircraft will service further growth opportunities and allow for capacity coverage required due to the existing fleet heavy maintenance program,” Alliance said.

Meanwhile, the number of full time equivalent staff rose three per cent to 465, “predominately for flightcrew and engineering staff required for the increased flying activity”.

“Alliance will continue to pursue new opportunities in the resources sector along with additional wet leasing activities and expand on its current tourism and leisure work,” the company said in a slide presentation accompanying its first half results.

“Alliance has invested in the business in the half year with the establishment of a fully resourced part sales business and the addition of aircraft and crew. Further growth in the business in future periods is expected from all of these activities.”

Statutory net profit for the six months to December 31 2017 came in at $7.1 million, down from $8.7 million in the prior corresponding period.

The company said the statutory result was impacted by income tax expenses of $3.2 million.

However, it said there was “no cash tax payment associated with this expense as the Group is currently realising available tax losses now and over future financial years”.

Meanwhile, profit before tax (PBT) rose 19 per cent to $10.3 million.

The company also reduced its net debt by $6 million, which Alliance chief executive Lee Schofield said put the company in a better position to take advantage of new opportunities.

“Alliance has continued its debt reduction strategy over the half year whilst at the same time negotiated successfully with its financiers for a renewed facility,” Schofield said.

“This has further strengthened Alliance’s balance sheet which will allow Alliance to react quickly when further opportunities present themselves.”

Alliance also reinstated an interim dividend for shareholders, which for the 2017/18 first half will be at 2.5 cents per share, fully franked.

An Alliance Fokker 50. (Rob Finlayson)

A file image of Alliance Airlines staff. (Alliance)

Source :  Australian Aviation

Qantas seeks to expand codeshare with Air Niugini

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A file image of an Air Niugini Boeing 737-800 at Sydney Airport. (Rob Finlayson)

Qantas is seeking to expand its codeshare agreement with Air Niugini on Australia-Papua New Guinea (PNG) routes.

The airline has applied to Australia’s International Air Services Commission (IASC) to add its QF code on Air Niugini’s nonstop Cairns-Port Moresby and Townsville-Port Moresby services.

The application also calls for the continuation of existing arrangements where the two carriers codeshare on the Sydney-Port Moresby route (operated by Air Niugini) and the Brisbane-Port Moresby route (operated by both Qantas and Air Niugini).

“Qantas believes that the continuation of existing code share arrangements and the proposed expansion offers maximisation of the public benefit,” Qantas executive manager of international affairs Rohan Garnett said in the submission to the IASC.

The IASC decision in late 2016 approved a free sale codeshare arrangement on the Brisbane and Sydney routes but did not allow Qantas to add its QF code on Air Niugini’s Cairns-Port Moresby service.

The Qantas application was vigorously opposed by Virgin Australia, which described it as the “single most significant barrier to entry on the PNG route“.

Virgin Australia is the only other airline offering regularly scheduled passenger flights between Australia and PNG with six flights a week on the Brisbane-Port Moresby route using Boeing 737-800s.

At the time, the IASC said it was “difficult to come to conclusions about likely outcomes” on the market with and without the codeshare.

As a result, it approved the codeshare on both the Brisbane and Sydney routes for a “trial period” in order to assess the impact on the market following 12 months of traffic and financial data to December 31 2017.

Since that decision was handed down, Air Niugini added Townsville as its fourth destination in Australia in April 2017.

Qantas’s submission to the IASC, dated February 16 2018, said Air Niugini was likely to cut flights to Australia if the existing codeshare arrangements were not able to be maintained and expanded.

This would result in reduced capacity, less flexible scheduling and a more limited range of fares for consumers.

“The code sharing arrangements have supported the ongoing viability of Air Niugini and, as such, are of vital importance to the PNG economy,” Qantas’s submission said.

“The additional traffic generated by the marketing carrier contributes toward operating costs and allows the operating carrier to maintain and/or operate more services.

“A reduction in Air Niugini’s schedules would be an almost certain consequence of the existing code share arrangements ending and the proposed expansion not receiving authorisation.”

In particular, Qantas said Air Niugini’s Townsville-Port Moresby flights would benefit from a Qantas’s codeshare, given the PNG carrier was considering dropping the route due to low passenger numbers.

“If the Qantas code was added to these services, the resulting access to Qantas’ distribution capability and marketing would assist in ensuring the benefits from this service are not lost,” Qantas said.

Further, Qantas said Air Niugini was unlikely to maintain Boeing 767-300 widebody flights on Brisbane-Port Moresby absent the codeshare.

A downgauge to smaller narrowbody aircraft would have a significant impact on the freight market between Australia and PNG.

“It is unlikely that alternative freighter operators would match the regular schedules from the Qantas/Air Niugini code share arrangements,” Qantas said.

Figures from the Qantas submission showed 274,324 passengers travelled between Australia and PNG in the 2016/17 financial year (FY17), a decline of three per cent from the prior corresponding period.

“These FY17 numbers are equal to total passenger traffic in financial year 2012,” Qantas said. This followed a seven per cent drop in 2015/16.

Air Niugini had the largest market share between Australia and PNG in 2016/17 at 54 per cent, down 3.4 percentage points from the prior corresponding period.

Meanwhile, Qantas improved its market share by 3.4 percentage points to 19.9 per cent, with Virgin Australia down 2.5 percentage points to 11.5 per cent. Third country carrier traffic grew 2.5 percentage points to 14.6 per cent.

The average seat factor on all Australia-PNG services in 2016/17 was at 52.2 per cent, Qantas said.

“Against the background of weakening passenger demand, the presence of other competitors and the potential for new entry continues to act as a competitive constraint on both Qantas and Air Niugini,” Qantas said.

Qantas noted it and Air Niugini both independently priced and sold services on the PNG route, with both carriers operating their own yield management systems. This created a “genuinely competitive dynamic”.

“Each airline offers separate fare structures and rules resulting in varied fare levels and fare conditions, giving passengers more choice and flexibility,” Qantas said.

Submissions in response to the Qantas application are due by March 2 2018.

 

Source :  Australian Aviation

OIC to attend event on media’s role in combating terrorism

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RIYADH: The Organization of Islamic Cooperation (OIC) is participating in the international conference on the role of media in combating terrorism in Cotonou, the capital city of Benin, West Africa, on Monday and Tuesday.
The OIC will highlight its efforts in addressing terrorism and Islamophobia, including campaigns on social media, creating a journalists’ guide for covering terrorism and holding seminars on countering Islamophobia in Western media.
The theme of the conference is “Media for World Harmony: Role of Media in Combating Terrorism and Islamophobia.”
“This is an annual meeting and conference by one of OIC’s affiliate institutions,” Maha Akeel, OIC director of Information Department, told Arab News on Sunday.

 

Source : Arab News

Saudi Arabia, Switzerland sign agreement to avoid double taxation

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RIYADH: Saudi Arabia and the Swiss Federal Council on Sunday signed an agreement to avoid double taxation on income and capital, as well as to prevent tax evasion.
The Saudi Minister of Finance Mohammed Al-Jadaan and the Swiss Minister of Finance Ueli Maurer, who is visiting Saudi Arabia, signed the agreement at the Ministry of Finance headquarters in Riyadh.
Al-Jadaan said the agreement represents a stable legal framework that defines the tax relationship between Saudi Arabia and Switzerland. He stressed that it clearly defines what taxation would be imposed by investors from both countries when exercising their activities in the contracting state, preventing double taxation on the income derived from investors’ activity.
Thus, this agreement reduces the tax burden on investors and is expected to achieve transparency in the tax system.
Al-Jadaan also called on businesses in the two countries to benefit from the advantages and reductions in taxes to establish more joint commercial and investment projects. He pointed out that the trade exchange between the Kingdom and Switzerland, which reached SR10.3bn in 2016, does not reflect the size of the economies of both countries.
Moreover, he urged Swiss businesses to learn more about investment opportunities, industries and commodities in order to increase Swiss imports from the Saudi Arabia.
This agreement is the 51st Double Taxation Agreement (DTA) that Saudi Arabia has signed with other countries.

Source : Arab News

One doctor for 358 patients

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By Hussein Hazzazi

Okaz/Saudi Gazette

JEDDAH — There are 23,979 Saudi doctors out of a total of 89,675 medical practitioners working in 274 Saudi hospitals, according to the latest Ministry of Health statistics.

These doctors serve 31,742,308 patients. This means, one doctor serves 358 patients.

Apparently, there is a huge shortage of Saudi doctors despite the annual government support of SR120 billion. This shortage has affected the quality of medical services and increased reliance on non-Saudi doctors.

A total of 71,775 of students enrolled in medical colleges this year, according to the MOH statistics.

There are 10,791 graduates, with women representing 54.9%.

There are 2,971 Saudi doctors working in the private sector. Government hospitals, however, continue to suffer from the shortage of doctors despite the Ministry of Health’s efforts to bridge the gap.

Privatization is one of the solutions which can help develop and improve the services of the healthcare sector as well as cut down expenses.

The Kingdom’s healthcare sector is the largest in the Gulf and the one to which the government allocates a big chunk of the budget.

The Saudi government has earmarked 13% of expenses to develop the healthcare sector since 2010.

It also works nonstop to improve the quality of the services in line with Vision 2030.

The government is planning to privatize the sector and create a conducive investment environment for local and international investors as well as raise the private sector’s contribution to the sector by 35% by 2020.

The Ministry of Health recently revealed a plan before the Shoura Council to privatize all government-run hospitals. A state-run company or group of companies will be established to own and run the state hospitals.

A recent report showed that the number of hospitals increased by 15% between 2008 and 2014.

Today, there are 312 state hospitals and 141 private hospitals.

The Shoura Council demanded that all Saudis should get health insurance before privatization begins. Health insurance will be mandatory for each and every citizen.

Some 12 million private sector employees and their family members have health insurance cover.

Saudis represent 20 % of them, according to the Council of Cooperative Health Insurance.

 Source :  Saudi Gazette