Hong Kong – Cost cutting efforts appeared to have paid dividends for Cathay Pacific after the airline announced a return to profit for 2009.

After making a loss in 2008, Cathay Pacific has now announced a £405million net profit, with ‘fuel hedging’ playing a major part in offsetting a drop in revenue of around 25 per cent.

However, the airline remains wary, believing the economic slump is still playing a major part in airline ticket sales. More passengers flew in the second half of the year, but the situation remains fragile, not least because of rising fuel costs.

It has been estimated that airlines lost around $11billion last year overall, so this success is likely to be a source of much pride for Cathay Pacific.

Air France has joined the battle for business travellers who are being forced to purchase cheaper flight tickets by offering ‘premium-economy’ cabins on some of its flights.

With businesses paying more attention to costs, many travellers are no longer flying first-class, but airlines have acknowledged that there is a gap in the market for these customers. Qantas has done away with first-class cabins in favour of premium-economy cabins, while Air France is approaching the same problem from the opposite direction by removing some of its cheapest seats in order to offer the same.

The premium-economy seats offered by Air France will allow 40 per cent more space for each passenger. This is great news for taller travellers who may actually be able to get some sleep on long-haul flights now.

The Unite union of cabin crew has drawn up a document outlining cost-saving measures that could be taken by British Airways and which could prevent a strike.

BA wants to cut around £60m from its budget for cabin crew and this document proposes savings of a similar amount. The deadline for announcing a strike is the 15th March, so the current meetings represent something of a last-ditch attempt at preventing industrial action.

81 per cent of Unite cabin crew have voted in favour of a strike. BA will study the cost-saving document over the next week and its response is likely to determine whether one goes ahead or not.

Willie Walsh, BA chief executive, says that staffing cuts on long-haul flights are unavoidable and believes that the 60m savings required can only be achieved through a reduction in pay for crew of around £2,000 – something which he believes the union will not acknowledge.

PARIS, FRANCE – Air France has announced that it will be increasing its numbers of long-haul flights this summer after detecting faint signs of economic recovery.

Capacity will be increased by a less-than-earth-shattering 0.8 per cent, but set against a backdrop of airlines folding or reducing the numbers of flights available, this is a relatively positive move.

However, overall Air France capacity will be reduced by 0.3 per cent, with medium-haul flights down by 4 per cent. The statement announcing these changes emphasises that recovery is very much dependent on the country in question, hence the apparent discrepancy in policy of increasing long-haul flights while reducing medium-haul flights.

The airline industry as a whole is set to post losses of around $5.6billion this year.

British Airways is set to appear in court after its method of allocating holiday pay to pilots was questioned by the Balpa union.

The issue revolves around the fact that BA currently provides holiday pay on the basis of the pilots’ basic salary. Balpa challenge this, saying that payments should be made taking into account other allowances.

Allowances can prove significant as BA pays pilots for time in the air, night flying and time away from home, all of which is in top of basic pay but none of which is taken into account in holiday pay calculations.

The airline is currently struggling financially and says changes could lead to 15,000 staff receiving an average of £600 more each year – perhaps not a gigantic sum for a business more used to measuring cash in millions and billions. Balpa has also challenged other airlines, including Virgin, BMI, Easyjet and Cityflyer.

A Thomas Cook flight from Turin to Birmingham had to make an emergency landing due to fuel leaking from it.

The fuel was spotted immediately after the Boeing 757 took off and the plane was forced to land. The airport was temporarily closed and the fire department were called to line the runway.

One of the passengers said that everyone who had been sitting on the back right of the plane could clearly see the fuel coming out, but said the pilot was a calming influence and that the eventual landing was smooth and controlled.

The fuel was cleared up inside an hour and the airport was then reopened. A Thomas Cook engineer came out from the UK and passengers were put up in hotels for the night. The leak was caused by a faulty valve, which was subsequently fixed by the engineer, allowing the passengers to travel today instead.

PARIS, FRANCE – Several French newspapers are reporting that Air France KLM is considering a deal with Japan Airlines to co-operate on routes between France and Japan.

Air France has denied the report, but the source of the story claims employees at the two airlines have said that they will standardise pricing and business practices as part of a deal.

A Japan Airlines spokesperson emphasised the strong relationship between the two airlines, but declared that there was no intention to work in partnership at present:

“Air France is our valued bilateral partner with whom we share code share flights connecting Japan to Paris and beyond, and we are committed to strengthening this relationship.”

Japan Airlines actually went bust last month, but has seen a brutal overhaul that involved a huge cull of around 15,000 jobs. It is continuing to do business and relies on partnerships with other airlines to maximise revenue – Air France KLM being one such partner.

JOHANNESBURG, SOUTH AFRICA – The largest commercial aeroplane, the A380 Airbus, landed in Johannesburg this morning after leaving from Paris Charles de Gaulle Airport earlier in the day.

The Air France flight is the first time an A380 has landed at OR Tambo Airport in Johannesburg and the airport needed to look at the amount of space it needed for taxiing about. Fortunately, the runways were already long enough, although the shoulders needed to be widened slightly to accommodate the A380’s large wingspan.

The extra capacity of the plane also means that there will be more baggage to be dealt with and potentially longer queues for passport control.

Air France first used the A380 on its Paris to New York flight route last November.

LONDON – British Airways‘ plans to create biofuel from food scraps at a factory in East London could lead to the creation of around 1,200 jobs.

Currently, the biojet fuel has not been approved for use, but BA remains confident that it will be responsible for the first factory in Europe to process food waste, turning it into eco-friendly jet fuel. Approval hinges on the results of tests that will examine the safety of aeroplanes powered in this way.

The plant is due to be finished in 2014 and British Airways are unconcerned that approval for the fuel is still pending, citing the fact that it is already approved in the US, meaning British airlines could technically use it.

It will now be easier to check in for BMI flights after the airline employed IBM to develop a self-service system. You can also now check in using your mobile phone or via the internet.

The new system will be available at all airports from which BMI currently flies and BMI are confident it will be a great benefit to passengers as the same system is already in use by several other airlines.

IBM commented, saying that it was an increasing concern that passengers have as smooth an experience as possible when checking in for a flight.