Virgin Australia's future, Aeroflot's turnaround, Qantas settles and more

Carry on: Business travel news also includes a Chinese airline pullback, Saudi tourism and Boeing on US-China tariffs.

Virgin Australia faces future
Air New Zealand is ditching its deal with Virgin Australia on October 27, allowing both airlines to go their own ways after a seven-year partnership for transtasman flights. Virgin Australia chief executive John Borghetti has responded with threats to expand its business in New Zealand.

But reports in Australia say Virgin Australia has had rumblings among its shareholders, with Abu Dhabi’s Etihad Airways said to be wanting to exit. This follows Air New Zealand selling its 26% shareholding two years ago.

Etihad owns just over 20% and is retrenching from other airline interests around the world after major losses from operations in Germany and Italy. Virgin Australia’s other shareholders are Singapore Airlines, which is unlikely to launch a full takeover, and two Chinese groups, HNA and Nanshan, which are restricted by financial and other issues.

The issue for Virgin Australia’s future is whether it remains a listed company so, if a major airline shareholder wants to sell, it can be offered to the public; or whether it goes private with just a few large shareholders, which is Mr Borghetti's preference and has been under board consideration. The airline has only just become profitable after many years but also needs capital to expand its international and domestic operations.

Virgin adds Sydney-Hong Kong service
Virgin Australia will launch its planned daily Sydney-Hong Kong service on July 2, supplementing the Melbourne-Hong Kong route, which will drop from daily to five times a week. Flight timings for Melbourne-Hong Kong will also change from a daytime flight from Melbourne and overnight return to an overnight service in both directions.

Chinese airline pulls back
After a two-year spurt of adding capacity to New Zealand, one Chinese airline is pulling back. Tianjin Airlines has reduced its Tianjin-Chongqing-Auckland route to once weekly from twice weekly. It has also suspended the once-weekly Tianjin-Xi’an-Auckland service until June 5. Tianjin launched its flights to New Zealand in December 2016.

From worst to best
The airline once known during the Soviet era as one of the world’s deadliest for its record of crashes, Russia’s Aeroflot, is now among the world’s most popular. A survey conducted by airline booking platform eDreams, based on 60,000 passenger reviews, ranks Aeroflot eighth, ahead of Air France and TAP Portugal. The result is based on four major characteristics: comfort, flight check-in, onboard service and prices for tickets. It is the latest in a series of awards recognising Aeroflot’s turnaround. It was named Best Airline in eastern Europe at the Skytrax World Airline Awards and Best Major Airline in Europe by TripAdvisor travellers, At the World Travel Awards 2017, Aeroflot was recognised as Europe’s Leading Airline Brand and Europe’s Leading Airline – Business Class. The APEX Official Airline Ratings named Aeroflot the 2018 Five Star Global Airline and it was named Favourite International Airline in China at the Flyer Award Ceremony 2017.

Qantas settles cabotage dispute
Qantas Airways has reached a settlement with the US government in a cabotage dispute involving codeshare operations. (Cabotage is the carrying of passengers within a country by a non-domestic airline.) The Department of Transportation charged Qantas with violation of aviation rules for carrying passengers within the US (New York-Los Angeles) when they were booked to other destinations on a partner airline to Tahiti and New Zealand rather than carrying on to Australia with Qantas. Qantas described the 1959 rule as outmoded in an era when codeshare agreements are common and benefit customers. Though it denied any wrongdoing, Qantas agreed to halt the practices cited and pay $US62,500 within one month and another $US62,500 if it violates the agreement within a year.

Boeing on US-China trade war
Boeing’s share price is a victim of the US-China tit-for-tat trade war, as a 25% tariff is proposed for aircraft imported into China. In a statement, Boeing says it hopes the dispute will be resolved soon. “While both governments have outlined positions that could do harm to the global aerospace industry, neither has yet imposed these drastic measures,” it says. “We will continue in our own efforts to proactively engage both governments and build on the recent assurances by US and Chinese leaders that productive talks are ongoing. A strong and vibrant aerospace industry is important to the economic prosperity and national security of both countries.”

Door opens to Saudi tourism
The Saudi Commission for Tourism and National Heritage (SCTH) says regulations governing tourist visas have been completed and submitted to the government for approval. Additionally, Saudi authorities have developed an integrated electronic system to process and record visa transactions, under the supervision of a team headed by the Ministry of Communications and Information Technology. Saudi Arabia plans to nearly double the number of incoming travellers to 30 million within the next 12 years, up from 18 million in 2016 when it earned $US11.9 billion in tourism receipts, primarily from visitors in the kingdom to perform Hajj and Umrah pilgrimages.

Route news of the week
Air New Zealand is adjusting its operations on the Auckland-Singapore route for the northern winter. From October 28, the Auckland departure will move from overnight to daytime, using a 275-seater 787-9, instead of a 302-seater. From Singapore, departure time will move from morning hours to evening hours for an overnight trip. Sichuan Airlines will extend its Chengdu-Prague route to Zurich from June 23. The flight uses an A330 and will run twice a week. Sichuan previously planned to operate a third weekly flight nonstop to Zurich. Hainan Airlines says its launch of a Shenzhen-Tianjin-Vancouver route on May 25 will now use a Boeing 787-8, instead of Airbus A330-300. This route is served twice a week.

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