Posts tagged LCC
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
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
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