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Airline Finance News - Asia / Pacific.

Aug 20, 2007

Centre for Asia Pacific Aviation (CAPA) estimates India's domestic air passengers will rise from 25 million in 2005/06 to about 60 million by 2010. However, 10 airlines, which added 150 aircraft in the last two years, have on order another 500. Supply has outstripped demand so much that carriers such as GoAir give away tickets for free while Deccan and SpiceJet sell some for as low as a few rupees to lure travelers. Aug 17, 2007

Consolidation in the Indian airline industry is also changing schedules. JetLite, formerly Air Sahara, is reworking its route network after Jet Airways acquired it in April. Airlines buoyed by the sector's more-than-25 percent annual growth have increased frequency and added new cities in the last three years, often stretching India's ageing airports. Aug 17, 2007

India's airlines are trimming the frequency of services on busy routes and withdrawing from unprofitable ones in a bid to reclaim pricing power and turn profitable, industry players and analysts said. Airlines are also renting freed aircraft to foreign carriers or returning planes to leasing firms to stem losses. Aug 17, 2007

China To Rein In Airline Growth. China will tighten control on the approval of new airlines, cut flights at its busiest airport in Beijing and raise safety checks, worried that the industry is expanding dangerously fast, the regulator said on Wednesday. No applications for new airlines will be accepted before 2010 and the growth of those already in operation will be controlled, the General Administration of Civil Aviation of China said in a statement. Aug 15, 2007

General Administration of Civil Aviation of China said a plethora of new airlines have appeared since 2005, including Okay Airways, Spring Airlines and Juneyao Airlines, after the government allowed private companies to enter the sector and opened it up further to foreign investment. The market's growth, on the back of an economic boom and rising incomes, has attracted attention not only from aircraft manufacturers Boeing and Airbus, but also the likes of Singapore Airlines, the world's biggest airline by stock market value. Yet despite billions of dollars spent to build new airports and upgrade old ones, delays are frequent as the infrastructure struggles to keep up. Aug 15, 2007

Air Deccan

Air Deccan's rival budget carriers SpiceJet and GoAir have also scaled back. While Go flies to 11 cities from 14, SpiceJet has cut frequency on the Mumbai and Goa routes. Go flew seven planes in March but has since sent three back to leasing firms. "GoAir has a unique flexible feet management plan. The objective is to ensure path to profitability," a senior GoAir official said. SpiceJet has leased its aircraft to a European carrier to offset low demand and earn lease income at the same time. Aug 17, 2007

Air Deccan

Deccan Aviation, which runs budget carrier Air Deccan, kicked off the exercise about a year ago by pulling out of Nashik and Agra after the two routes continued to make losses, a spokeswoman said. Deccan, which has the 'common man' as its mascot and targets first-time fliers, provided connectivity to several towns for the first time, only to be hit by record losses. It has the largest network, among Indian carriers, of 65 cities and towns. The no-frills airline had posted a net loss of INR2.13 billion rupees in the quarter to March, the last reported, and analysts do not expect it to turn profitable before 2008/09. Aug 17, 2007

Air India, Air India Express

Air India, in a written reply to a question in parliament, said Air India's budget carrier, Air India Express, planned to start domestic operations from October in addition to its existing international operations. The government recently merged state-run carriers Air India and Indian into a new company, National Aviation Company. The merger is expected to take two years to complete. Aug 15, 2007

Air India, JAT

Air India Has No Plans To Buy JAT. Air India has no plans to buy Serbia's state-owned carrier JAT and is yet to decide on a proposal from JAT for a strategic alliance, Civil Aviation Minister Praful Patel told parliament on Tuesday. The Serbian government plans to privatize JAT, whose assets including its 20-year-old fleet mainly of Boeing 737 planes and real estate are estimated to be worth USD$150 million. In June, an Air India spokesman said the carrier was considering a strategic alliance with JAT, and could later bid for an equity stake if there was an agreement on the valuation and sharing of profits. Aug 15, 2007

Air Vanuatu

Vanuatu government will sell a minority stake in flag carrier Air Vanuatu, with World Bank Group member IFC advising. Air Vanuatu operates to Sydney, Auckland, Brisbane, Nadi and Noumea in addition to a number of domestic destinations, IFC said. According to the AirGuide Aircraft Fleets database, the carrier operates one 737-300, one ATR 42 and two Twin Otters. It has a 737-800 and three Y-12s on order. Aug 13, 2007

AirAsia X

Virgin to invest in AirAsia X. A purchase by Sir Richard Branson of the Singapore International Airlines[sup.1] 49% holding in Virgin Atlantic Airways has not been ruled out. Asked in Kuala Lumpur, (Malaysia), where he announced a 20% investment by Virgin Group in AirAsia X, Sir Richard said: "Not for the moment, but you never know what might happen in the future." Aug 13, 2007

Airblue, Airbus, Boeing

Airblue, which started operations in June 2004, also flies to Dubai and Manchester, and plans to expand its international routes. The International Finance Corporation (IFC), the World Bank's private sector arm, has agreed to provide financing worth USD$25 million for pre-delivery payments, and Airblue plans to get an ECA (Export Credit Agency) credit to fund the purchase of its aircraft announced at the Paris Air Show last June. Aug 17, 2007

Cathay Pacific Airways

Cathay Pacific Airways and Dragonair flew a combined 7.26 billion RPKs in July, up 2.2% from the year-ago month. Capacity rose 0.8% to 8.59 billion ASKs and load factor improved 1.1 points to 84.6%. Aug 16, 2007

China Southern Airlines

China Southern Airlines flew 7.7 billion RPKs in July, up 14.7% from the year-ago month. Capacity climbed 13% to 10.05 billion ASKs, lifting load factor 1.1 points to 76.6%. Aug 17, 2007

China Southern Airlines

China Southern Airlines reached a deal with majority investor China Southern Air Holding Co., a state enterprise owning 50.3% of the carrier, to purchase the entire equity interest in China Southern Airlines Group Air Catering Co., the assets of Guangzhou BiHuaYuan Training Centre and the assets of Hong Kong-based Nan Lung Travel & Express (including its 51% stake in Nan Lung International Freight) for a combined CNY269.5 million ($35.5 million). In turn, CSAHC will purchase CZ's 90% stake in the Guangzhou Aviation Hotel for CNY74.7 million. Aug 17, 2007

China Southern Airlines

China Southern To Buy Catering Assets. China Southern Airlines said it would buy in-flight catering services, training facilities in Guangzhou, and the airline and air cargo agency service from its controlling shareholder for CNY269.51 million yuan (USD$35.53 million) in cash. The airline said in a statement late on Tuesday it would also sell all of its 90 percent stake in Guangzhou Aviation Hotel to the controlling shareholder, China Southern Air Holding, for CNY74.72 million yuan. China Southern Airlines said the deals aimed to optimize its assets structure and help tighten cost controls. Aug 15, 2007

Indian Airlines

State-run Indian Airlines has withdrawn its Mumbai-Pune and Kolkata-Dhaka service citing losses, civil aviation minister Praful Patel said in a written reply to Parliament on Thursday. Loss-ridden carriers have sold aircraft and diluted equity to stay afloat. While SpiceJet is looking to raise funds for the third time, Deccan sold stake to rival Kingfisher Airlines. Jet Airways also plans to raise USD$400 million through a rights issue. Aug 17, 2007

Qantas Airways

Qantas reportedly will spin off its loyalty program in the mold of Air Canada's Aeroplan, which will become part owner of the Australian carrier's Frequent Flyer program, according to newspaper reports in both countries. Neither Qantas nor Aeroplan is commenting, but major media outlets in both countries reported that Qantas, while keeping a controlling stake in Frequent Flyer, will list it publicly on the Australian Securities Exchange in less than a year and is negotiating with Aeroplan to take a stake. Qantas[sup.1] Frequent Flyer program is estimated to be worth A$3 billion ($2.5 billion). Aeroplan was spun off in 2002 and has about 5 million members. Expanding beyond air travel rewards to hotels, resorts and other consumer services, it is widely considered a major success. It reported second-quarter revenue of C$220.3 million ($209.1 million), up 20.7% over the year-ago quarter, with operating income ahead 51.2% to C$47 million. Aug 15, 2007

Qantas Airways

Qantas faces $47m fine for fixing. Qantas Airways is facing fines and claims for damages that could amount to at least $100 million after allegedly colluding with other airlines to fix fuel surcharges on its cargo flights to the US. The national carrier admitted last night that it will make a $47 million provision in this year's accounts to cover a potential fine imposed by North American regulators who a fortnight ago hit British Airways and Korean Air with penalties totalling $700 million. The precise nature of Qantas's disclosure of its $47 million provision for the alleged price-fixing activities in its freight operation indicated that the airline may be involved in a deal with the US authorities to accept an agreed fine. Aug 13, 2007

Shenzhen Airlines

Shenzhen Airlines plans to raise as much as $1 billion in an initial share sale to fund fleet expansion next year, according to a report in the South China Morning Post. As a privately run airline, Shenzhen has found it increasingly difficult to reach loan deals with banks owing to its high asset liability rate, even though it has posted net profits for 10 consecutive years. The carrier remains committed to its "369" strategy of expanding its fleet to 70 aircraft in three years, 100 in six and 160 in nine. It now operates 45 A320s and 737s. Aug 15, 2007


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Comment:Airline Finance News - Asia / Pacific.
Publication:Airguide Online
Date:Aug 20, 2007
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