Posts tagged budget airline
Two big wins for the Philippines’ Clark International Airport: FedEx will return to the Philippines and plans to use the airport as its hub, while surging low-cost carrier AirAsia will build a passenger base there for its new local affiliate, AirAsia Philippines.
At 2,367-hectares, Clark International Airport is about four times the size of Ninoy Aquino International Airport in Manila, about 90 minutes’ drive away. It is located within the Clark Freeport Zone and industrial area on the site of a former US military base.
AirAsia Philippines plans to start flying in October to Hong Kong, Macau, Singapore and Bangkok with a fleet of four aircraft, before expanding out to other Asian destinations. Its parent company, AirAsia, already flies between Clark and Kuala Lumpur and Kota Kinabalu, which will continue alongside the new services.
FedEx’s main Asian hub is at Baiyun International Airport in Guangzhou, and is the company’s largest outside the United States. Before relocating there, it operated out of another Philippines economic zone (and former US base) at Subic Bay but found itself unable to expand operations to meet customer demand. The loss of FedEx was a blow to the Subic Bay and administrator Subic Bay Metropolitan Authority, which lost 600 jobs and around P160 million (US$3.76 million) a year in revenues.
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
Asia’s most booming airline is teaming up with one of its strugglers to hopefully produce profit: AirAsia Japan, a subsidiary owned by All Nippon Airways (ANA) will become the first low-cost carrier to fly out of Narita International Airport near Tokyo by August 2012.
The announcement was something of a surprise, since AirAsia X began flying out of Tokyo’s second international airport, Haneda, just this year and ANA also announced its own budget airline venture, Peach Aviation, in May. AirAsia X will continue to operate from Haneda for the foreseeable future, while Peach will be based at Kansai International Airport near Osaka and serve mainly the domestic market.
Even so, the move is an interesting one given the dramatic drop in tourist inflows to Japan after the March 11 disasters and a reluctance among Japanese to spend on luxuries like travel in the face of national hardship. Japan’s other major traditional carrier, Japan Airlines (JAL) has repeatedly flirted with bankruptcy over the past few years and home-grown domestic carriers have struggled to offer the kind of discounts seen in other countries, given Japan’s high landing fees and manpower costs.
AirAsia’s CEO Tony Fernandes remained confident his airline could do better, saying enhanced links in travel and tourism would boost economic ties between East and Southeast Asia and produce growth. ANA will hold a 67% share in AirAsia Japan, with plans to fly domestic routes and longer-haul services to South Korea and Taiwan.
source & article: news.com.au
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
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
Low cost carrier AirAsia already runs flights between Kuala Lumpur and the Philippines. But it just announced it will deepen its relationship by purchasing a 40%, US$8 million stake in AirAsia Inc, a new joint venture company with an initial working capital of US$25 million.
CEO Tony Fernandes said he expects the new operation to be profitable from the beginning, and is currently negotiating with Philippines’ authorities for final approval and is deciding whether to use Clark or Subic International Airport as its hub.
AirAsia already has subsidiaries in Indonesia and Thailand, and recently began flying to South Korea and Japan. While there are rumors the company plans to begin future operations in Vietnam and Singapore, Fernandes says they are focusing on the Philippines venture for the moment. The airline will fly both domestic and international routes, and promises to make affordable flying finally available Filipinos.
Supplementing the launch was AirAsia’s announcement it will also sponsor the Philippines Patriots, 2009-10 Grand Final Champions in the Asean Basketball League.
source & article: The Star online
update: BT: Existing Philiippines carriers are reportedly not happy about AirAsia’s entry into their market as they face cost-cutting problems of their own, but are ‘bracing for competition‘.
Another airline will soon jump into the Asian budget flight market, with Thai Airways and Singapore’s Tiger Airways teaming up to form a new low cost service. The new airline, Thai Tiger Airways, will begin flying out of Bangkok’s Suvarnabhumi International Airport in Q1 2011. Thai Airways and another Thai entity will hold a 51% share, while the remaining 49% will belong to Tiger.
The move is yet another sign that both the Asian airline and travel industries are set for a tumultuous time as passenger numbers increase and more companies compete for their business. Analysts at the Centre for Asia Pacific Aviation (CAPA) say it could also lead to entry barriers falling in some countries where smaller airlines have traditionally been locked out.
Tiger Airways, based in Singapore and part-owned by national carrier Singapore Airlines, began flying in 2005 and is modeled on RyanAir, the successful European budget carrier. It flies to 37 destinations in 11 countries and also operates Tiger Airways Australia, a domestic airline.
source & article: Yahoo! Singapore