Saturday, May 30, 2009

Passengers find good deals over airlines tussle

PETALING JAYA: The fight for passengers is getting more intense by the day and this week alone several airlines came up with their best deals to win over travellers.

Malaysia Airlines (MAS) has some attractive bargains if you catch them early.

One that stands out is the flight to London at RM888 one way all inclusive.

In the same segment, rival Emirates’ offer is at RM1,300 for a return trip to London minus surcharges and tax.

The all inclusive fare is RM1,720 with a minimum transit time of four hours in Dubai.

It also has an option for a stop-over in Dubai for an additional RM75.

AirAsia X’s offer is at RM575 one way excluding taxes to London via Stansted airport.

Both AirAsia X and MAS fly direct to Britain.

“Airlines really need passengers to fill capacity and they are dropping fares to stimulate demand. The fight is not just for leisure travellers but also corporate travellers that are looking for bargains,” an industry expert said.

Perth, which is five hours away from KL, has also seen a surge in the number of carriers plying the route which was traditionally only flown direct from KL by MAS.

AirAsia X made its debut on this route at the end of last year, followed by Singapore’s Tiger Airways and Jetstar Asia this year.

There are now five carriers flying from KL to Perth, two (MAS and AirAsia X) of which are direct and three (Singapore Airlines, Tiger and Jetstar Asia) via Singapore.

Fares have dropped from nearly RM2,000 for a return journey to one way fares of less than RM300.

Due to the over supply, it would be no surprise if fares go down further in the coming months, especially if the economic crisis continues, the industry expert said.

With consumers spoilt for choice, is the market big enough for so many airlines?

None of the airlines want to say if they are flying full capacity or announce their load factor on their routes for fear of letting out competitive information.

But there is surely a market for everyone, it depends on how aggressive an airline is to stimulate demand, they say.

“Perth is good for us as we have the network to connect passengers from Perth to Malaysia and its domestic points, as well as beyond Malaysia. The demand in this market matches the number of fights that we are offering,’’ said Dr Amin Khan, a senior general manager at MAS in charge of network and revenue management.

A Jetstar Asia spokesman said its Perth-Singapore service, launched in December, “is performing well and to expectation.”

MAS flies nine times a week direct from KL to Perth, and SIA twice daily from Singapore-Perth.

AirAsia X, JetstarAsia, and Tiger Airways fly once daily to Perth.

AirAsia Plans USD$143 Mln Rights Offering

29 May 2009

Malaysian low-cost airline AirAsia s planning a MYR500 million ringgit (USD$143.1 million) rights offering as it expects debt levels to climb this year, its chief executive said on Friday.

AirAsia CEO Tony Fernandes said the airline has finalised the size of the planned issue at MYR500 million but it has not decided on the timing.

"(We are) still exploring," Fernandes said when asked if he expects the sale share to happen this year.

AirAsia, Southeast Asia's largest budget carrier with a market capitalisation of USD$848 million, had said it expects borrowings to swell by up to MYR2.1 billion this year as it takes delivery of 14 Airbus aircraft.

"In the context of MYR7 billion of debt and MYR27 billion of committed capex, we consider this level of leverage extreme and consider an equity issue a distinct possibility," said investment bank UBS in a note published after the airline's quarterly results.

AirAsia on Thursday said first-quarter net profit jumped 26 percent from a year ago to MYR203.15 million, helped by

Friday, May 29, 2009

Korean Air, Asiana and SIA higher, JAL steady. AirAsia, Virgin Blue and Qantas lose ground

29 May 2009

Shares in Korean Air and Asiana Airlines rebounded 2.2% and 1.5%, respectively, on Thursday, as the broader Korea Composite Stock Price Index (KOSPI) rose 2.2% after jitters at the start of the week over the North Korean nuclear test. Wall Street’s solid lead overnight could pave the way for another rise on the KOSPI today, though airline stocks could come under pressure from higher oil prices.

AirAsia revealed solid earnings in the March quarter, but investors were expecting even more. The LCC’s shares eased 2.3%.

Virgin Blue gave up almost half of Wednesday’s 9.3% gains, falling 5.1% yesterday as the carrier stated it would consider further domestic capacity cuts in its upcoming financial year commencing 01-Jul-2009. The planned 2.4% reduction in capacity could swell to around -5.5%, according to CEO, Brett Godfrey. Qantas’ shares eased 3.1%. There are growing concerns about the swine flu outbreak in Australia. The number of cases in Australia has surged to over 100. Qantas meanwhile has today released its Apr-2009 traffic showing further considerable weakness in international yield.

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Asia Pacific selected airlines daily share price movements (% change): 28-May-09

AirAsia Says Second-Quarter Passenger Traffic May Jump 21%

29 May 2009

AirAsia Bhd., Southeast Asia’s largest low-cost airline, said second-quarter passenger traffic is headed for a 21 percent jump, matching last quarter’s increase as budget-conscious travelers look for cheap air fares.

“For the moment, things are rosy,” Chief Executive Officer Tony Fernandes said in a Bloomberg Television interview from Kuala Lumpur today. The “second-quarter demand looks good.”

Profit at the Sepang, Malaysia-based airline climbed 26 percent in the first quarter to 203.2 million ringgit ($58 million) after the company flew more passengers and added new routes. The carrier’s surging traffic contrasts with slumps at regional rivals including Singapore Airlines Ltd., which is cutting routes and capacity.

The airline expects to fly 24 million people this year, Fernandes reiterated today, as the company adds routes in India and expands flights to existing destinations in China. AirAsia, which has ordered 175 Airbus SAS planes, is increasing its capacity by about 20 percent each quarter, he said.

AirAsia may be considering a 500 million-ringgit rights offer to raise funds to pay for new aircraft, CIMB Investment Bank Bhd. said in a report today. Any rights issue isn’t imminent, CIMB said. Fernandes declined to comment on the report.

AirAsia today rose 1.6 percent to 1.27 ringgit at 10:56 a.m. on the Kuala Lumpur stock exchange, set for the highest close in more than a year. Malaysia’s benchmark Composite Index added 0.5 percent. The airline’s first-quarter results were released after the market closed yesterday.

Growth at the airline contrasts with declining passenger numbers worldwide. Global airline passenger traffic fell 3.1 percent in April from a year earlier, according to the International Air Transport Association.

AirAsia, which currently flies to one destination in India, will fly to at least six more airports in the South Asian nation before the end of 2009, Fernandes said.

“India’s going to be a big play for us this year,” he said. “We’re not going to slow down our expansion.”

Budget carrier AirAsia's profit jumps 26 percent

28 May 2009

Budget carrier AirAsia said Thursday its net profit surged 26 percent in the first quarter from a year ago, reflecting the success of its aggressive network expansion amid the global economic slump.

AirAsia rebounded from two straight quarterly losses to a record a profit of 203.2 million ringgit ($56.4 million) for the quarter through March, it said in a statement.

Revenue increased 33 percent to 714 million ($198 million), buoyed by a sharp rise in passenger volume and increased contribution from ancillary income, it said.

"AirAsia once again delivered record profit growth despite operating in one of the most challenging economic environments," Chief Executive Tony Fernandes said in a statement.

He said the airline carried 3.15 million passengers during the period, up 21 percent from a year ago, showing that it had successfully stimulated the market to seize share from competitors.

AirAsia accounted for 44 percent of passenger traffic at Malaysia's main airport during the quarter.

"We're adding routes, increasing frequencies, hiring more staff, enhancing our capabilities and growing our airline...our strategy to continuously conduct aggressive promotions and enhance customer service has been successful in driving strong traffic growth," he said.

AirAsia said it expects passenger growth of 15 to 20 percent this year despite the economic crisis. In 2008, it carried 11.8 million passengers, up 22 percent from a year ago.

AirAsia Scrapping Bangkok-Johor Baharu Route

28 May 2009

BANGKOK-- AirAsia is stopping its Bangkok-Johor Baharu route beginning July this year, the second time it is taking such measures.

In an email to passengers who have booked flights from July onward, the budget carrier said AK5632 from Senai and the returning AK5633 would be cancelled.

In February 2008, AirAsia resumed its Bangkok-Johor Baharu route with four flights a week, flying on Mondays, Wednesdays, Fridays and Sundays.

It had intended to be the first destination in Thailand from Johor Baharu, targeting Johoreans, Singaporeans and those flying into the city from Sabah and Sarawak, but low load factor forced AsiaAsia to scrap the route.

Currently, AirAsia and its Thai subsidiary, Thai AirAsia, operate seven flights daily from Kuala Lumpur to Bangkok, as well as serving Krabi, Phuket and Chiang Mai, on top of the Penang-Bangkok route.

The Bangkok-Langkawi and Bangkok-Kota Kinabalu services were discontinued in 2007 due to low passenger load.
25 May 2009

Virgin Blue's shares rose 3.9% (up 1c to AUD0.27) yesterday, as investors digested the carrier's Apr-2009 traffic report released on Friday (pax +8.6%, ASKs +30.8%, LF -0.9 ppts to 76.3%). Investors seem generally pleased traffic is holding up, although concerns remain over industry yields.

Qantas will report its yield/traffic figures for the year to April later this week and further falls are likely following depressed figures in March.

Qantas' shares rose 1.1% yesterday, as the carrier announced plans to temporarily remove First Class seating from Sydney-San Francisco, Sydney-Buenos Aires and Melbourne-Hong Kong-London services, in response to the economic slowdown and weak premium demand. These are targeted adjustments to right-size capacity in markets where Qantas faces no First Class competition (with the exception of United Airlines on the Sydney-San Francisco sector). Qantas is also selling exit row seating from next month, as part of aims to boost ancillary revenues.

Elsewhere, Singapore Airlines gained 1%, while AirAsia surged 4.2% ahead of its results announcement on 28-May-2009. Jet Airways eased 0.6% as it reported another deep full-year loss.