Posts tagged airlines
Here’s an interesting story: reports indicate that AirAsia is about to embark on a share-swap deal with its chief competitor and Malaysian national flag carrier, Malaysia Airlines (MAS). Sources have told Malaysian newspapers that the budget carrier will gain a 20% share of MAS under a partnership agreement.
The companies have supposedly been negotiating the deal for the past year. The sources also say the Malaysian government’s investment arm Khazanah Nasional will get a share in AirAsia and Tune Air Sdn Bhd will receive a stake in MAS. AirAsia’s CEO Tony Fernandes is also CEO of Tune Air, which itself owns a 26% share of AirAsia.
Neither Malaysia Airlines or Khazanah Nasional, its 70% shareholder, are commenting on the matter. It’s understood a formal partnership between the two rivals would enable them to compete more effectively in the global market, and bargain from a position of greater strength with airports and aircraft manufacturers.
AirAsia, which focuses on the budget end of the market, recorded a profit in Q1 of 2011 while Malaysia Airlines, which focuses on the traditional and higher end, recorded a loss and is undergoing a management restructure.
source & article: Channel NewsAsia
A very interesting week the Southeast Asian air travel industry, with some big news coming out of the International Air Transport Association (IATA) meeting in Singapore. Some highlights were:
Malaysia Airlines (MAS) will join the Oneworld Alliance, joining a network that spans 900 destinations in over 146 countries. Members of the alliance align their various policies and procedures and adopt common specifications in service, engineering and maintenance, also reducing costs through parts-sharing and bulk buying. MAS’ entry, which was sponsored by Australian national carrier Qantas, saw the share price rise 1.4% to RM1.44, its first increase in three trading sessions. The Oneworld Alliance also includes British Airways, Cathay Pacific, American Airlines and Japan Airlines.
Singapore Airlines and Virgin Australia announced a long-term partnership, giving each access to dozens more routes in the Asian/Australian/Pacific region and enabling frequent fliers to earn and redeem points for each other’s flights. Two quirks of the agreement were: (1) it must still be approved by regulators before going ahead; and (2) it excludes the lucrative Australia-US routes long coveted by SIA, but from which it has been blocked by the Australian government.
Meanwhile, Singapore’s international gateway Changi Airport announced its passenger traffic would surpass 50 million a year by 2014. It’s already serving 42 million at present, and officials said it would have reached the 50 million mark even sooner if not for the global financial crisis a couple of years ago. Low cost carriers supply 22% of Changi’s numbers, while traffic to and from destinations in Southeast Asia and Northeast Asia grew 18%, compared to the airport’s total traffic growth of 13% in 2009.
sources: Bloomberg, The Star, IATA, Yahoo! Singapore, AirportBusiness.com
Indonesia’s national airline Garuda announced this week it would develop South Sulawesi’s capital Makassar as a ‘third hub’, after Jakarta and Denpasar (Bali). The state-owned company said its move was part of the government’s ‘Six National Economic Development Corridors’ concept to identify and nurture unique economic strengths in Indonesia’s regional areas.
Garuda’s CEO Emirsyah Satar said the airline was “always responsive towards market trends and quick to cash in on growing economic potentials in various regions,” and added his hopes to increase passenger travel, improve service and thus stimulate the local economy.
Under Indonesia’s Six Economic Corridors plan, Makassar is being developed as a business hub. With a population of nearly 1.5 million, the city has a plum strategic location both in Indonesia and between the growing markets of Australia and East Asia, and a 70% service-based economy. Garuda runs direct flights from the city to other business centers, like Singapore and Balikpapan in Borneo. Sulawesi Island itself is being developed as a production and manufacturing center for agriculture, plantation, fishery and the national nickel mining products.
From now on, travelers from Makassar can fly Garuda direct to thirteen domestic and international destinations.: Ambon, Balikpapan, Biak, Denpasar, Jakarta, Jayapura, Palu, Surabaya, Gorontalo, Manado, Ternate, Timika, and Singapore.
source & article: Garuda
Some good news for Indonesia’s travel industry this morning, although possibly at Malaysia’s expense: Low-cost carrier AirAsia announced it would move its regional headquarters from Kuala Lumpur to Jakarta this year, looking to capitalize on Indonesia’s much larger and increasingly wealthy consumer base.
The airline said its move won’t impact Malaysian operations, but it does challenge Malaysia’s ambitions to be a regional transit hub. AirAsia is also busy recruiting staff for its new AirAsia Singapore operation, and CEO Tony Fernandes said they would be ‘night-stopping’ aircraft in the city to meet early morning flights.
Business has been pretty good for AirAsia this year. It has 49% stakes in Thailand and Indonesia, both set to go public in 2011, and has begun a joint venture to start AirAsia Philippines. It made a RM1.1 billion (US$364 million) net profit last year, doubling that of the previous year and beating analysts’ projections of RM822 million ($272 million). It operates 105 aircraft with another 122 on order and options for 63 more. Passenger demand also continues to increase, filling 82% of available spaces.
source & article: The Malaysian Insider
AirAsia has launched a year-long promotion called “To Japan With Love”, aimed at increasing traffic to and from Japan and raising money to donate to disaster relief and recovery.
Fundraising efforts over the coming year include donation boxes placed on all AirAsia, AirAsiaX, AirAsia Indonesia and AirAsia Thailand flights, short and long-haul. They’ll also be selling wristbands with the promotion’s slogan and will donate all money collected to the Japan Platform, a group of 32 NGOs working to help and rebuild Japan’s stricken Tohoku region.
The promotion coincides with special fares designed to increase tourism to Japan, a vital step in rebuilding the economy. AirAsia is offering one-way economy flights from Kuala Lumpur to Tokyo Haneda (its primary route) for RM199 (US$66.60) and special deals for Japanese tourists wishing to head the other way.
AirAsia’s CEO Azran Osman-Rani will also join adventurer and mountain climber Khoo Swee Chiow on a climb to the summit of Mt. Fuji as part of an eight-mountain tour. The company had also previously donated cargo space on its flights to Japan to ferry humanitarian aid.
Malaysian local airline Firefly has banked on the Iskandar Development Region, launching a fifth hub in Senai. The area was currently an “ugly duckling” that would soon blossom, and is far cheaper than having a base at Singapore’s Changi airport, said the company’s managing director Eddy Leong.
Firefly aims to have nine aircraft flying by the end of 2011, including seven 737-800 and two 737-400 aircraft, the latter to be based at the new Senai hub. Leong stressed that his company didn’t intend to use Senai to compete with Changi, but to complement it. Transport services along the Singapore-Johor Bahru corridor are expected to improve in future, making Senai a practical alternative to low cost carriers.
Firefly also announced new flights from Johor Bahru to Kuching and Kota Kinabalu to begin in May/June, and is applying to operate flights even further afield to Bangkok and Jakarta, Surabaya and Bandung. The airline plans to carry 3.5 million passengers this year from Senai and its four existing hubs at Kota Kinabalu, Subang, Kuala Lumpur International Airport and Penang.
The Senai segment of the Iskandar Malaysia special economic region is growing fast, and within five years it should see mega projects constructed such as a new private hospital operated by Columbia Asia, a branch of the UK’s Marlborough College Malaysia, plus shopping malls and theme parks.
source & article: The Edge Malaysia
Singapore Airlines (SIA) was hammered from all sides by foreign regulators this month, with provisions and penalties from the European Union, United States and South Korea taking a S$199.1 million (US$155 million) chunk out of the company’s third quarter net profits.
Quarterly profits would otherwise have increased by 20.7%, at a time when the world’s airlines are beginning to recover but competition is heating up among Asian and Middle Eastern carriers. Profit forecasts are down to a net $9.1 billion from 2010′s $15.1 billion, though still up from 2009′s shocking $9.9 billion total loss.
SIA’s problems with the authorities stemmed from its cargo division, which was fine 74.8 million euros for violating EU competition laws (though it looks set to appeal the decision). The division was also charged with cargo price fixing in the United States, and settled on a fine of $48 million.
Singapore Airlines also appointed a new CEO at the end of 2010, the 47 year old Goh Choon Phong taking over after the seven year reign of Chew Choon Seng. Goh, now one of the youngest CEOs of a major Singaporean company, reportedly surprised observers with his fast rise and extremely low profile.
Singapore-based budget carrier Tiger Airways, itself owned partly by Singapore Airlines, posted a 60% Q3 profit increase to S$22.6 million ($17.66 million) and increased its revenue 22% to S$170.4 million. Increased competition from low-cost airlines are among the more intimidating threats to the ‘traditional’ airline business.
source & articles: Reuters via Yahoo! Singapore
Indonesian flag carrier Garuda will soon begin roadshows for its upcoming IPO, scheduled for 11 February. The company is hoping to raise US$500 million through the sale of 9.36 billion shares, bringing public ownership of the state-controlled airline to 36.5% and using the funds for capital expenditure and pre-delivery payments.
Garuda is also responding to an increase in passengers from Australia to Jakarta by expanding its Sydney-Jakarta route from three times weekly to once a day. While Bali has traditionally been in the #1 destination for Australian passengers, an upgrade of international transit facilities at Jakarta has made the airport a more attractive destination and stopover for passengers on their way to Europe and other parts of Asia. The airline also offers a ‘visa on board’ service, reportedly the first of its kind in the world.
Australian low-cost carrier JetStar is also looking forward to a bumper 2011 in Asia, with new direct services and an expected increase in Asian region tourism.
JetStar recently launched direct flights between Melbourne and Singapore, and will add direct Auckland-Singapore flights in March 2011. The airline says it is now the largest low-cost operation at Singapore’s Changi Airport and intends for its new routes to grow, with outbound tourism from Australia to Singapore and JetStar Asia’s 22 other destinations all increasing in the previous year.
The airline already flies eight Airbus A330 planes on its long haul routes and has ordered another three. It also hopes to attract more Asian tourists back to Australia as well, hinting at the possibility of a triangular service such as Singapore-Auckland-Melbourne at some stage in the future.
source & article: The Australian
National flag carrier Garuda Indonesia will soon upgrade its service between Jakarta and Kuala Lumpur, increasing passenger capacity by up to 40% and flying the new Boeing 737-800 Next Generation (738NG) aircraft.
The new aircraft, beginning service next month, feature individual LCD touch screens in Executive and Economy Classes with video on demand (VOD) entertainment systems with a wide selection of video and audio programming.
Garuda currently flies KL-Jakarta twice daily, a service especially popular with business travelers and Malaysian golfers. The airline is offering special value added services to these travelers with flights leaving KL at 8:00am and departing Jakarta 5:10pm (and others leaving KL 12:45pm & departing Jakarta next morning at 8:45am), plus special luggage provisions excluding golf bags from allowed weight. Executive Class passengers will also have access to fast-track immigration procedures to further streamline the experience.
source & article: AviationRecord