Thursday, September 16, 2010

Is it necessary to buy travel insurance before flying?

15 September 2010

PETALING JAYA: It is hard not to notice that travel insurance is being offered whenever one books one’s tickets with an airline company. These days, air tickets come with an offer for travel insurance.

However, some travellers often ask if it is necessary to buy travel insurance when purchasing the air tickets. Well, if any airline can guarantee, among others, that your plane will be on time, your luggage will arrive safely on the same flight or you will not meet with an accident, then it is not necessary to purchase travel insurance.

For many though, travel insurance has eased the pain of cancelled flights, delayed travel and interrupted trips as witnessed recently with the Icelandic volcano eruption that caused havoc on international flights around the world and threw hundreds of thousands of travellers into a state of stranded chaos.

On the local front, both Malaysia Airlines (MAS) and AirAsia Bhd currently offer travel insurance purchase for customers buying air tickets via their web portals.

Johan Aris Ibrahim ...’By the end of 2010, AirAsia Insure will be available for most of our destinations.’

In 2008, MAS was the first full-service carrier in Asia to offer its travel insurance online. The MHinsure policy provides travellers comprehensive insurance coverage for unexpected losses during their journey with access to Mondial Assistance’s 24-hour worldwide assistance.

According to MAS general manager business development Visva Sabaratnam, the scheme has been well received with 25% of the carrier’s passengers purchasing it.

He said the comprehensive policy included overseas medical expenses, travel delays, trip cancellation, loss of baggage and personal effects, and home protection in case of damage to the home during the travel period.

“We promote MHinsure on our website, call centre and ticketing offices, From the response thus far, there is certainly good awareness of this service.

“We also see an estimated 30% of international policy holders who have purchased MHinsure more than once in 2009, indicating satisfaction with the product offerings and services provided, including claims experience,” he told StarBiz.

Apart from MAS passengers, those departing from Malaysia, Singapore and Australia on any other airline can purchase MHinsure from these countries on the MAS website.

MHinsure is currently available in Malaysia, Australia, Germany, France, Italy, the Netherlands, Singapore and Sweden, and was recently introduced in the UK, United Arab Emirates and New Zealand.

With this, a total of 11 countries in the MAS network now offer online travel insurance. According to the MAS website, travellers need only to complete the online travel insurance application to be eligible for cover. There is no need for medical examination. MHinsure also offers travellers the same premium regardless of age. The premiums are based on travel duration and destination.

Commenting on its competitiveness, Sabaratnam said MHinsure was developed with the primary objective of ensuring high quality cover at affordable prices.

MHinsure Basic Plan starts from RM15 for domestic travel for a 30-day cover and RM23 for international cover for a five-day trip.

Sabaratnam said whichever international cover customers chose, MHinsure offered customers unlimited financial coverage in the case of an overseas emergency evacuation or repatriation. “This sets us apart from the rest.”

Meanwhile, AirAsia head of financial services and loyalty Johan Aris Ibrahim said AirAsia started selling travel insurance online in 2005 and the recent rebranding of its insurance product as AirAsia Insure from Go Insure had boosted public awareness on the offering.

“The rebranding exercise was prompted by AirAsia’s plans to expand the insurance services regionally and to reinforce its position as the only Asean low-cost carrier to offer travelling insurance coverage,” he told StarBiz.

He said the response had been “positive regionally” and guests were starting to be insurance-conscious when travelling, whether for business or leisure.

“We have gone from strength to strength in offering AirAsia Insure and the number of policies sold has been growing at 30% annually,” Johan said.

AirAsia’s plan starts from RM7.50 for the AirAsia Insure one-way cover for domestic travel to RM49 for AirAsia Insure return cover for international travel (11-30 days).

“Besides Malaysia, AirAsia Insure is available for travel from Singapore, Thailand, Indonesia, Macau, Hong Kong, China and Australia,” Johan said.

“By the end of 2010, AirAsia Insure will be available for most of our destinations and at our affiliated companies for purchase at AirAsia, and

“There is an option to purchase insurance online as a notification or prompter will alert customers on AirAsia Insure when they buy their tickets online. We have invested in strategic and targeted advertising and promotion activities,” he said.

Airlines aside, travel insurance is also offered by travel agencies, banks and insurers. In addition, credit card issuers often issue complimentary travel insurance policies to cardholders that charge ticket purchases to their cards.

By Leong Hung Yee

The Star

AirAsia X opens tickets to Tokyo from next week

15 September 2010

Airline will be first foreign low-cost carrier serving Haneda airport from Dec 9

PETALING JAYA: AirAsia X will begin flights to Haneda airport in Tokyo on Dec 9 and open ticket sales for the sector next week.

The airline plans to mount three weekly flights and it will be the first foreign low-cost carrier serving the airport that is expected to open for international flights in late October.

Asashi newspaper in Japan reported that AirAsia X was expected to price fares far lower than those charged for existing services between the capitals of Japan and Malaysia offered by Japan Airlines and Malaysia Airlines (MAS).

Azran Osman-Rani says flying to Tokyo would be ‘super exciting.’

AirAsia X chief executive officer Azran Osman-Rani declined to reveal any pricing when contacted yesterday by StarBiz. But the market is abuzz with talk that the introductory price could range from RM99 to RM199.

Azran said that flying to Tokyo would be “super exciting as finally people will have choices and low fares to go to great places.’’

Three flights per week may be too few for AirAsia X but for now the airline does not have much of a choice.

It is learnt that the Japanese authorities had accorded seven rights and the Malaysian authorities awarded three each to AirAsia X and MAS, and one to Transmile.

“Japan is a high fixed cost city and with so few flights it would be difficult to make the sector sustainable so we will have to convince the authorities to grant us daily flights,” Azran said.

MAS will introduce three flights a week between Kota Kinabalu and Haneda from Nov 15.

Haneda airport is the main domestic hub for Tokyo but due to congestion in Narita, it will start receiving international flights next month. Haneda is just a 20-minute monorail or cab ride from downtown Tokyo whereas Narita is at least an hour’s train ride, and the trip can take over two hours by car on clogged roads.

To beat potential competition from six foreign low-cost carriers from China and South-East Asia, both Japanese carriers – Japan Airlines and All Nippon Airways (ANA) – want to set up low-cost airlines.

ANA has inked a deal with Hong Kong’s First Eastern Investment Group to set up a new airline that will start operations in the second half of 2011. ANA will own 39% in the venture and Far Eastern 33%. The balance equity will be sold to other investors.

By B.K.Sidhu

The Star

AirAsia slashes 20% off all seats, all flights

14 September 2010

AirAsia is slashing 20% off all seats on all flights for bookings made from 14 – 19 September 2010.

Guests are able to enjoy this special promotion for the immediate travel period from 20 September – 15 November 2010.

Be spoilt for choice when selecting your dream destination as all flights and all destinations are included in this promotion. Fly to Europe, Australia, China, India, the whole of South East Asia and all over Malaysia for 20% less.

Kathleen Tan, Regional Head of Commercial, AirAsia said: “We decided to have a 20% slash off as we feel that AirAsia guests deserve to have low fares to all the destinations we service globally to experience the vast connectivity of our route network.”

Discounted fares on already ultra low fares for flights will enable guests to use the savings for accommodation and activities at their holiday destinations. AirAsiaGo provides guests with value-for-money choices on over 70,000 hotels and more than 5,000 tours and activities worldwide.

Tuesday, September 14, 2010

AirAsia X still in talks to start Paris route

09 September 2010

'It is still premature (to set a date), it is definitely not this year,' AirAsia X's chief executive officer Azran Osman-Rani said. -- PHOTO: AP

KUALA LUMPUR - LONG-HAUL budget airline AirAsia X said on Thursday it has no plans to begin flights to Paris this year, according to a top official, after French reports it had been given a slot at Orly Airport.

French media had reported that the carrier, which will operate the route after its affiliate AirAsia won landing rights in October last year, has been given a slot at the southern Paris airport starting from next month.

'We are not looking at flying to Paris on October 31,' AirAsia X's chief executive officer Azran Osman-Rani told AFP.

'It is still premature (to set a date), it is definitely not this year,' he said, adding that the carrier was still in talks with the French authorities on 'operational matters'.

French newspaper La Tribune, without specifying its source, reported that AirAsia has been given a slot to operate the Kuala Lumpur-Paris route twice a week from October 31.

The paper said the airline however intends to start these flights in 2011 and was targeting to fly four times a week. -- AFP


Sunday, September 12, 2010

AirAsia X Appoints Carat Korea

09 September 2010

Woohyun Nam, General Manager of Carat Korea, announced today the agency has won the AirAsia X account following a pitch against incumbent Group M.

Carat Korea will become the hub for the client to design integrated communications planning, including media buying, detailed media planning of offline, outdoor and digital.

Carat Korea is able to offer the client a communications strategy that goes beyond a typical media execution, together with a strategic direction integrating online and offline.

“We were very impressed with the Carat team’s understanding of the market insight and their passion for our business. We know Carat will be our key partner to grow our business in South Korea,” said Spencer Lee, AirAsia X Marketing Manager.

Woohyun Nam added, “ I believe it is a great opportunity to partner with AirAsia, who have been named the world’s best low cost airline. Carat Korea will utilise the experiences of previous global brand launches such as H&M to achieve success for AirAsia.”


CAE awaits first Air Asia MPL class in Dallas

08 September 2010

CAE is expecting its initial multi-crew pilot license (MPL) class to arrive in Dallas this month or in October to start the intermediate portion of the 56-week programme.

The twelve candidates are part of beta class designed to train crews starting with zero initial flight time for positions with Asian low-fare carrier, AirAsia.

Upon completion of the programme, the trainees are expected to receive an MPL license from Transport Canada and Malaysian authorities, after which they will enter AirAsia's initial operating programme for Airbus A320 first officers. AirAsia and CAE announced the program in February.

The 12 candidates are currently finishing the second phase of the four-phase programme, which included basic flying skills and 70h of single-engine flight time in Moncton Flight College in Canada. During phase two, the group will spend six months in intermediate training at CAE's SimuFlite centre in Dallas, which will include training in a twin-engine Beechjet 400 business jet flight training device.

The fourth and final phase of the programme will take place at CAE's headquarters in Montreal, where the students will train in an Airbus A320 full-flight simulator.

The programme is expected to be complete in March or April 2011.

By John Croft


AirAsia runs exclusive ‘Two to Go’ promo via its social media platform

08 September 2010

AirAsia, the world’s best low cost airline which has surpassed half a million fans on its Facebook page, continues to strengthen its social media channels with an exclusive ‘Two to Go’ promotion.

Offering guests two seats for the price of one, this incentive is made available until 8 September 2010 is for the travel period from 14 September – 15 November 2010.

Whether you are a beach bummer, an adventure seeker or a shopaholic, this is a promotion not to be missed. A wide selection of domestic and international destinations inclusive of Perth, London, Chengdu, Mumbai, Delhi, Bandung, Hat Yai, Colombo, Hong Kong, Jakarta, Kota Bahru, Langkawi, Terengganu and many other destinations from as low as RM19*.

Guests can also take advantage of the immediate travel period of this promotion to enjoy a quick getaway during the upcoming Hari Raya holidays.

AirAsia continues to reward its fans for their support with exclusive promotions via its social media platforms. This is the third time AirAsia has embarked on such initiatives to give exclusive value to all their Facebook Fans.

Guests can also receive real time updates on our latest promotions, events and other AirAsia-related information via Twitter ( and the AirAsia blog (

Peanuts!Low Cost

TAA taps Chiang Mai for northern hub

08 September 2010

Thai AirAsia will make Chiang Mai its third hub, after Phuket and Suvarnabhumi airports, as the no-frills carrier creates an additional sub-network to complement its expanding coverage.

The Chiang Mai hub, through which the airline will operate direct links with other destinations in Thailand and overseas, is due to be up and running in January.

The airline, part of Asia's largest low-cost carrier group, will inaugurate its northern hub with three routes, from Chiang Mai to Hat Yai, Bangkok and Singapore, all with daily frequencies.

Thai AirAsia chief executive Tassapon Bijleveld said that establishing services directly out of Chiang Mai would enable the carrier to exploit untapped traffic opportunities, especially in the leisure sector.

"By offering non-stop flights between Chiang Mai and other destinations, we'll encourage more people to fly more conveniently with less time, cost and hassles involving flight connections," he said.

The creation of a new hub will be made possible by the delivery in January of a new A320 jet from the European planemaker Airbus. The twin-engine, single-aisle 180-seat jet, Thai AirAsia's 20th, will be based at Chiang Mai International Airport.

Thai AirAsia launched Phuket as its second hub in 2009 in a strategic move to open up a new market, bypassing the traditional route that goes through Bangkok's Suvarnabhumi airport.

Today, the airline operates frequent services out of the Thai southern resort island to seven cities: Bangkok, Chiang Mai, Udon Thani, Hong Kong, Jakarta, Singapore and Kuala Lumpur.

In May, Thai AirAsia suspended flights from Phuket to Ho Chi Minh City in Vietnam and Medan in Indonesia, as traffic demand has been lower than expected. These flights began last December.

On Oct 12, the airline will start a new route, Phuket-Udon Ratchathani, with three flights a week, on Tuesday, Thursday and Saturday.

Sixteen of Thai AirAsia's current fleet of 18 A320s operate through Suvarnabhumi with two based in Phuket.

It is taking delivery of its 19th A320 next month as it continues to aggressively expand domestically and regionally with the launch of long-awaited flights from Bangkok to Indian cities such as Mumbai, New Delhi and Kolkata, possibly in the fourth quarter.

Other major Thai cities including Hat Yai and Udon Thani are candidates for Thai AirAsia's next hub, though Mr Tassapon did not give a time frame for its establishment.

Bangkok Post

Kingfisher shares soar following BA codeshare announcement; AirAsia to float AirAsia X

07 September 2010

Several Asian stock markets advanced for a fourth consecutive session on Monday, with the Nikkei Stock Average (Tokyo) rising 2.1%, the S&P/ASX 200 (Sydney) adding 0.8%, The Sensex (Mumbai) gaining 1.9%, the NZX 50 (Wellington) increasing 1.2% and the Wintek (Taipei) soaring by the daily 7% limit. The stock market advances occurred following better-than-expected US job data which eased economic concerns and buoyed Wall Street on Friday.

Kingfisher Airlines was the best stock of the day, jumping 8.8% after the carrier signed a codeshare agreement with British Airways, and British Airways CEO, Willie Walsh, commented its future oneworld member partner was “clearly the best partner” in India.

Mr Walsh, who stated the carrier has a list of 12 potential takeover takeover targets, added that if the Indian Government amends its Foreign Direct Investment (FDI) legislation “all airlines around the world will look at the possibility to invest in Indian carriers”, adding, “I have no doubt Indian carriers would welcome such foreign investment because airlines are looking at strengthening their financial position.”

Meanwhile, Davy Stockbrokers commented: "I would say Asia is number one in the [BA] context that it's a high-growth market. India is very important for them and I suspect Kingfisher is top of the list."

Meanwhile, KSEMA Fincon recommended Kingfisher Airlines as a good stock to buy in the upcoming six months, while SMC Global Securities commented that Kingfisher “can be a good stock to look for” at a target price of INR78, commenting: "Kingfisher is in the backdrop of their debt restructuring … Once the debt is removed and the restructuring efforts are successful then the company's efficiency levels and their profitability levels will significantly go up and because of this debt levels, even the stock has remained under pressure for quite some time and going forward, there can be a good strong relief rally in the stock."

Also gaining strongly was Jet Airways (+5.6%), while on the other end of the spectrum, Tiger Airways’ shares declined 2.0%.

Thai Transport Ministry summons Thai Airways to explain LCC JV agreement

Thai Transport Ministry has summoned Thai Airways to explain its agreement with Tiger Airways to jointly launch LCC, Thai Tiger Airways. The carrier will answer questions from the Ministry on 15-Sep-2010, with the Ministry claiming the carrier is yet to clarify some of its issues of concern. Transport Minister, Sohpon Zarum, has insisted Thai provide full details of the JV and has stated that if the agreement is found not useful or lawful, it would be halted.

AirAsia confirms plans to float AirAsia X

In other Asia Pacific LCC news, AirAsia CEO, Tony Fernandes, commented that the group plans to float AirAsia X as he is seeing “a bit of contamination” between the way AirAsia and AirAsia X are operated.

The carrier will list in Malaysia and possibly in London or New York. The CEO declined to disclose how much of the business will be sold to outside investors, but stated AirAsia's 16% stake in AirAsia X would be “treated as an investment” and sold down gradually. However, the two airlines will not be fully separated and will continue to share a website. Four executives, including Mr Fernandes, will remain on a board for both carriers. Shares in AirAsia gained 1.1% yesterday.

Asia Pacific selected airlines daily share price movements (% change): 06-Sep-2010

Source: Centre for Asia Pacific Aviation, Reuters & Financial Times

Airlines leverage on social media sites

06 September 2010

Carriers stir interest in travelling, do promotions and even sell tickets

PETALING JAYA: As travellers become more Internet and social media-savvy, airlines have started to leverage on social media sites for branding, promotion and marketing.

Airlines including Malaysia Airlines (MAS), AirAsia Bhd, Singapore Airlines, Cathay Pacific and Delta Air Lines are using Twitter, Facebook, YouTube, Flickr and even blogs to market themselves and engage with the public.

Some airlines turn their Facebook page into a fan page whereby they can connect with their fans on the Internet. Some promote their business, products, and new offerings on Twitter to reach out to more people.

MAS senior general manager, commercial strategy, Dr Amin Khan said the carrier had a two-pronged approach for its Facebook and Twitter accounts.

“For Malaysia Airlines Travel on Facebook, @MAS Twitter account and blogger engagements, our primary objective is to inspire travel by engaging and building a connection with our fans and followers.

“Our efforts here are focused on engaging our younger audience and customers, around 20 to 35 years old. This includes promoting our fares and deals, destinations, travel stories and competitions,” he told StarBiz.

Amin said MAS started its social media outreach including the Malaysia Airlines Travel on Facebook in March 2009.

“To date, we have more than 125,000 fans on Malaysia Airlines Travel on Facebook and some 16,500 followers on @MAS Twitter account.”

He added that the MH Deals by Malaysia Airlines on Facebook, which started in January, had 37,000 fans and it had 3,500 followers on @MHdeals Twitter account.

“We also have 11,500 fans on MH Students Facebook pages. A majority of them are students who are currently studying in Australia, New Zealand, Japan and India.”

MAS has managed to generate great interest with its lunch hour sales on Facebook.

“The idea for the lunch hour sale came from our Facebook fans. We are constantly engaging with them to get their feedback on what they would like to see. We are also planning other promotions according to ticket availability and seasonality,” Amin said.

A quick search on Twitter revealed that AirAsia has one of the most followers on its Twitter account with some 50,086 followers.

The budget carrier had previously operated under AirAsiaDotCom on Twitter. However, last Friday it announced to its followers that it had managed to secure back its @AirAsia twitter handler.

AirAsia has 478,708 fans on its main Facebook site. On top of the country specific sites that AirAsia has on Facebook and Twitter, it has a dedicated AirAsia YouTube channel, AirAsia Blog: Just Plane Thoughts and Flickr account as its official gallery of AirAsia pictures.

Media specialists see social media as a great platform to get the online community involved, to motivate them to travel, get them to spread the word on which airline to use.

“Most of these airlines make use of Twitter to introduce new events, offer a limited number of air tickets at discounted prices, etc,” a media specialist said.

She added that airlines were beginning to use social media productively. “Facebook is an excellent way to engage customers. And both MAS and AirAsia are doing it well.”

She said both carriers managed to encourage their customers to engage with one another. “They made it easy to access the airlines and build relationships. Potential customers can also ask questions and get help. If their customers are happy, it means returning customers to the carrier.”

She said it was good to note that AirAsia had managed to put links on its websites to generate interest on its Twitter and Facebook pages and vice-versa.

“It (AirAsia) manages to interact well on Facebook. Every news item it posts seems to get feedbacks and there are heaps of praises from fans.”

Last month, US-based Delta Air Lines had introduced the Delta Ticket Window, a Facebook application that allows its fans to find, book and share flights via the “Book a Trip” tab on its Facebook Page.

The carrier believes it can capitalise on a captive audience given that Facebook is the most trafficked website on its inflight WiFi service. It is a cutting edge offering for the airline which is unparallelled by other airlines.

Asked if MAS would start offering such service, Amin said its offerings would tie in closely with its digital strategy. “For example, we are revamping our MASTraveller portal as part of our strategy to inspire travel. In line with this, our Facebook and Twitter accounts will be promoting destinations and encouraging user-generated content.”

“We also have a social media feature on MHmobile. After a customer books his ticket on, he will be able to share his itinerary on his own Facebook page, Tripit or Dopplr. This ensures that all his friends are aware of his travel plans, and he is also able to make other travel arrangements such as hotel bookings and car rentals via Tripit or Dopplr,” Amin said.

Amin said all its channels were focused on attracting consumers to its main website, MAS employee bloggers also share their experiences on its official blog.

The carrier has a team managing the Facebook pages and Twitter accounts beside traditional media and other digital initiatives such as the website, applications for our mobile site,, mobile gadgets and others.

by Leong Hung Yee

The Star

Freak accident kills Air Asia staffer at Hyderabad airport

05 September 2010

Retracting aerobridge traps Guest Services Officer's hand

A Guest Services Officer of Air Asia, Amritha Roy, died after her hand got trapped in a retracting aerobridge at the Rajiv Gandhi International Airport (RGIA) at Hyderabad on Sunday morning.

Ms. Roy, aged 24, had ensured that the Air Asia passengers bound for Kuala Lumpur boarded the aircraft and was on the aerobridge number 55, when the operator began bridge retracting operations. Ms. Roy’s hand got trapped in the telescoping aerobridge.

“She immediately collapsed out of shock and was rushed to Apollo Medical Centre at the airport for emergency medical attention,” an airport press release said later. She was declared dead by doctors.

The airport police have registered a case of death due to negligence (Sec. 304-A) based on a complaint by the Airport Manager Suraj. Airport Station Police Inspector R Sanjay Kumar said the police would investgate the incident and the aspect of negligence. However, no one has been cited as accused in the FIR, he added.

P. Sripathy, CEO of RGIA in Hyderabad said, "The airport authorities have formed a committee headed by Deputy CEO and comprising the Chief Operating officer of Delhi Airport and Chief Security Officer at Hyderabad Airport to investigate the incident and ascertain complete facts of the case."

“The incident is most unexpected in nature and it is very unfortunate. We deeply condole her death and our prayers are with her family”, the airport press release added.

Ms.Roy hails from Kolkata. Her body is being sent there, airport sources said.

K. Srinivas Reddy

The Hindu

Hedging of jet fuel

04 September 2010

PETALING JAYA: To hedge or not to hedge? The medium-term volatility of oil prices is giving the aviation sector a headache.

While hedging is an instrument that airlines can use to mitigate the impact of rising jet fuel costs, it is becoming increasingly difficult to rationalise the use of such an approach given the downward risk of global crude oil prices.

“The oil price volatility is one, an airline’s limited resources to invest in such an activity is another,” an analyst with a foreign research company said about challenges that airlines face today in getting their hedging position right.

“But if they did not hedge, rising jet fuel could potentially crush their operating margins, and dent their financial positions,” he added.

Crude oil prices, which determine the direction of jet fuel prices, are expected to average at US$79 a barrel by the fourth quarter of this year. As of last week, the International Air Transport Association’s (IATA) forecast of the average jet fuel price for 2010 stands at US$88.30 per barrel.

Industry experts claimed that crude oil prices could rise to an average of US$85 a barrel next year and US$100 a barrel by 2012.

Nevertheless, the trend of these oil prices remained largely unpredictable due to the weakening momentum of the global economic recovery.

As it is, some argued that there were more downward potential to crude oil prices (than there were upside potential) as they saw demand for the commodity softening in line with the trend of a slower economic growth in the next one to two years.

Still, not many airlines can afford to take the risk. This is because jet fuel represents one of the single-largest cost components for most airlines, accounting for up to one-third of their operating costs per passenger.

So, managing the cost element becomes even more significant as failure to do so can be detrimental to the business of the carrier.

A case in point: According to IATA, 25 airlines went bankrupt in the first half of 2008 due mainly to their inability to cope with rising fuel costs.

To recap, crude oil prices then were rising progressively from US$75 per barrel in the middle of 2007 to an all-time high of US$147 in July 2008.

Consequently, jet fuel prices within a span of 12 months also surged more than double to surpass US$170 per barrel in the middle of 2008. (Crude oil prices have since fallen to hover around the US$70 to US$80 per barrel level now, while jet fuel prices are currently hovering around the US$85 to US$95 per barrel level.)

So, to help stabilise their cost structures, airlines would typically hedge a portion of their fuel requirements at a pre-determined price for a specified period, while leaving the remainder to be purchased at spot prices.

Domestically, we see national carrier Malaysian Airline System Bhd (MAS) hedging 60% of its fuel requirement at US$100 per barrel for the rest of 2010, and 40% at US$100 per barrel for 2011, while local low-cost carrier AirAsia Bhd has hedged 26% of its fuel requirement at US$85 per barrel for 2010.

AirAsia has not entered into any hedging yet for 2011.

“Given the downside risks of crude oil prices, no one can be for sure whether it is a right or wrong strategy to hedge.

“As long as the airline hedges its fuel requirements, there will always be the realisation of marked-to-market gains or losses for every quarter of their financial results,” an analyst explained.

It’s a bet, analysts note. If airlines hedged their fuel requirements at a price lower than the market prices, then they would have protected their margins from being crushed by rising fuel prices.

But if market prices of fuel did not rise above the level at which airlines have hedged, then their under-hedged position would cost them extra money, which could probably lead to some booking losses.

For instance, MAS booked a marked-to-market loss of RM217mil from its hedging position for the three months to June 2010, widening its net loss to RM537mil for the period in review.

The average price of jet fuel for the quarter to June was around US$90 per barrel.

Chances of the jet fuel price exceeding US$100 per barrel for the rest of this year are slim, hence it is likely that MAS’ financials would continue to be burdened by its hedging position.

Nevertheless, investors have to take note that marked-to-market gains or losses resulting from hedging positions do not in any way reflect the airlines’ operational efficiency.

“It’s just a tool to mitigate fuel price volatility, and probably help to a certain extent... but ultimately, airlines would have to focus on the structural part such as fleet modernisation and optimal utilisation of resources to improve their operational efficiency and effectiveness, and that’s what gives them the competitive edge over their industry peers,” an analyst explained.

“And as long as the airlines can grow their revenue per available seat kilometre, they will be in a better position to cushion the effects of fuel price hike and enjoy better margins,” he added.

By Cecilia Kok

The Star

AirAsia to be ABL title sponsors

03 September 2010

KUALA LUMPUR: AirAsia are the new title sponsors for the Asean Basketball League (ABL), which begins on Oct 2.

It is not the first time that they are part of the ABL. They were the official carrier for the inaugural 2009-10 season.

AirAsia group chief operating officer Datuk Seri Tony Fernandes said that the new partnership would strengthen the ABL, which was gaining in popularity.

“We are very excited for the new season to arrive and proud to be back in the ABL with a bigger role by being the title sponsors,” he said. “As an Asean airline, it is our obligation to help develop the standard and quality of sports in the region.”

Exciting venture: AirAsia group chief operating officer Datuk Seri Tony Fernandes (sixth from left) giving the thumbs up after a sponsorship signing ceremony yesterday.

The second edition of the ABL features six teams – defending champions Philippine Pa­­triots, Satria Muda Britama (Indonesia), Brunei Barracudas, KL Dragons, Singapore Slingers and Cobras (Thailand).

The format of competition remains the same with a triple home-and-away for the league stages and a best-of-three series for the playoffs scheduled for February, including the final.

The Star

Friday, September 3, 2010

Air Asia Eyeing Halim Airport

31 August 2010

- The Ministry of State-owned Enterprises (SOEs) acknowledged that Malaysia-based airline Air Asia states its interest to patch up an airport in Indonesia. One of the targets is Halim Perdanakusumah Airport.

"They want to manage an airport, and the name Halim is out," said SOEs State Minister Mustafa Abubakar in Jakarta, August 31.

According to Mustafa, Air Asia was willing to oversee an airport in Indonesia but it could not yet reveal the prepared allocated investment.

In addition to Halim Perdanakusumah Airport, Air Asia also viewed that the Terminal 3 of Soekarno-Hatta Airport will need better management, for there is no balance between the domestic and international terminals.

In addition to Air Asia, Mustafa said that a number of airport administrators are eyeing several airports in the country, including one managing Schiphol Airport in the Netherlands.

The minister said foreign investors are starting to put into consideration the development of various airports, especially Soekarno-Hatta, which is more visible and profitable.

Antique, Syahid Latif

AirAsia X Launches Ex-Australia Promotion

31 August 2010

AirAsia X is slicing 20% off all Australian flights to Kuala Lumpur and back to celebrate the arrival of Spring.

AirAsia’s 20% Off Spring Sale is on from Wednesday, 1 September, until 5 September 2010, with 20% off all flights between the Gold Coast, Melbourne and Perth and the Malaysian hub of KL.

The travel period runs between 1 September 2010 and 14 November 2010. The sale also applies to AirAsia X’s new Premium FlatBed seats.

The Premium seats offer standard business class specifications of 20” width, 60” pitch and stretch out to 77” in full recline position.

They also feature universal power sockets, adjustable headrests and built-in personal utilities such as tray table, drink holder, reading light and privacy screen.

AirAsia X is also offering hot deals on some old favourites departing Kuala Lumpur including Ho Chi Minh from $3, Phuket from $5, Penang from $26, Langkawi from $30, Singapore from $32, Bangkok and Siem Reap from $67 and Bali (Denpasar) from $71. Terms and conditions apply.

Virgin Blue pax up in Jul-2010; AirAsia focuses on ancillaries; Thai Tiger revising business

30 August 2010

Shares in Virgin Blue gained 3.2% on Friday, the same day the carrier released its traffic results for Jun-2010 and Jul-2010.

The carrier reported a 7.3% increase in passenger numbers to 1.6 million (1.4 million for domestic operations and 283,500 on international services) in Jul-2010, with an average load factor of 81.6% (78.7% for domestic and 86.0% for international routes). This follows 1.5 million passengers in Jun-2010 with an average load factor of 75.4%.

Thai AirAsia, Indonesia AirAsia may convert debt into equity when listing

In other Asia Pacific LCC news, AirAsia CEO Tony Fernandes stated Thai AirAsia and IndonesiaMalaysia Business Times report on 30-Aug-2010. The collective debt of the two carriers is approximately MYR800 million. Mr Fernandes added that AirAsia’s 49% shareholdings in Thai AirAsia and Indonesia AirAsia would be diluted once they are listed. AirAsia may look to convert their debt into equity when they seek listing, according to a

Mr Ferndandes also said the carrier aims to increase ancillary income to USD19.14 (MYR60) per passenger in the next three years. Shares in AirAsia gained 1.9% on Friday.

Tiger financially strongest option for LCC JV

Also in the region, Thai Airways President, Piyasvasti Amranand, commented that the carrier selected Tiger Airways as its partner to launch LCC JV, Thai Tiger Airways, after looking at a number of options, including Jetstar, Dragonair, Cebu Pacific and Lion Air.

Mr Amranand said Tiger was selected as it is financially the strongest and the two airlines have the “same business concept” and “same enemy”. The two are now revising a business plan, to include regional and domestic routes. Mr Amranand said the carrier would not be losing aviation slots to Tiger Airways as a result of the JV.

Cebu Pacific yet to decide on timing for IPO

Meanwhile, Cebu Pacific parent, JG Summit Holdings Inc, stated it is yet to decide the timing of plans to launch an IPO for the LCC. The company said the timing of the offer would depend on approvals from the stock exchange and securities regulator.

Selected LCCs daily share price movements (% change): 27-Aug-2010

Source: Centre for Asia Pacific Aviation, Yahoo! Finance & Reuters

Motor racing-Lotus now fully focused on 2011 car

27 August 2010

Formula One newcomers Lotus are now fully focused on next season and taking on the sport's established teams, technical head Mike Gascoyne said on Friday.

The Malaysian-owned team are currently best of the three all-new outfits on the starting grid but are still some distance away from the other nine and a long way from scoring their first points.

Friday at the Belgian Grand Prix marked another milestone for the revived marque, returning after the demise of the original Lotus team in 1994.

"Today was the day a year ago that we actually first walked around our factory and there were three of us," recalled Gascoyne.

"Now there are 220 of us. We hope that we can do a better job for next year, so that is clearly where our focus is."

Lotus, run by AirAsia aviation entrepreneur Tony Fernandes, designed their first car in a hurry but Gascoyne said the 2011 one should be a far more considered effort.

"While it is still important for us to try and maintain 10th place in the championship, I think the most important thing as one of the new teams is that we make that step and close the gap to the established teams and we are able to race them properly," he said.

"I think just being on the grid for us was a huge achievement but you are only a new team once and we are not a new team next year. We are a Formula One team and we have to make sure that we are performing as one so we very much switched our focus on to next year's car."

Lotus's best result in 12 races so far has been 13th for Finland's Heikki Kovalainen in Australia in March.

The old Lotus team founded by the late Colin Chapman won seven constructors' titles between 1963 and 1978 as well as six drivers' crowns.

"Gearbox and hydraulics have been a particularly weak area," said Gascoyne of this season's performance.

"We haven't had the resources to put all the fixes in place and I think we have been let down by some suppliers who have not done as good a job as they should have done. But you cannot make excuses. You have got to put things right," he added.

"I think we are now very much on top of it."


Win Up to 100 Free AirAsia Flights

27 August 2010

AirAsia has launched a regional “Tell Us Your Story” promotion, which offers, until 4 October 2010, the chance to win up to 100 free flights.

The “Tell Us Your Story” contest is part of AirAsia’s regional Real People Real Stories branding campaign which is gearing up to celebrate AirAsia’s 100,000,000th guest flown.

Kathleen Tan, Regional Head of Commercial, AirAsia said, “From a humble beginning of two aircraft, one destination and a staff of 250 nearly nine years ago; AirAsia now has a fleet of 95 aircraft (and counting), over 130 exciting destinations and 8,000 staff globally. AirAsia has also been awarded the “World’s Best Low Cost Carrier” by Skytrax for two consecutive years in 2009 and 2010. For the past 9 years, AirAsia has redefined air travel across Asia, and not only made it possible for everyone to fly but helped to fulfilled dreams, create job opportunities, and changed the lives of nearly 100,000,000 people who has flown with AirAsia. The airline has been bridging communities in underserved markets such as Bandung, Banda Acheh, Trichy and Hat Yai which no other airline services. That is the AirAsia story in a nutshell, but it is now time for your story to be heard.”

Share how AirAsia has changed your life for the better in any form and submit it before 4 October 2010. You can blog about it, film it, tweet about it, or in any other creative ways you can imagine and stand a chance to win up to 100 free flights. Entries are encouraged to be tagged with the phrase AA100M.

New LCC terminal may have aerobridges

27 August 2010

Both MAHB and AirAsia are looking into it

PETALING JAYA: Aerobridges may be a feature at the country’s new low-cost carrier terminal (LCCT) for which the ground breaking is slated for Monday.

Malaysia Airports Holdings Bhd (MAHB) has proposed this facility and AirAsia Bhd is mulling over it.

“We have not used that before but it is a proposal and we will look at it. As long as our cost does not go up (too much) and we can still maintain the 25-minute turnaround time, we will be happy to have aerobridges.

“It would be for the comfort of passengers,” AirAsia Bhd group CEO Datuk Seri Tony Fernandes told StarBiz.

Now come rain or shine passengers have to walk up to board the plane(pic). At the new LCC terminal there may be aerobridges.

AirAsia has resisted aerobridges in the past as it needs to keep its cost base low to enable the airline to offer low fares to travellers. The challenge ahead would be to change with the times and offer comfort whilst still manage at low cost.

The ground breaking, to be witnessed by Prime Minister Datuk Seri Najib Tun Razak, will mark the construction of the new LCCT, which is expected to be completed in 2012.

The RM2bil terminal can handle 30 million passengers and will be close to the existing KL International Airport (KLIA) terminal. There will be 72 gates and a new dual-mode runaway that will allow for 25 minutes turnaround time and increase efficiency.

It is learnt that the LCCT will be modelled after KLIA. A joint venture between UEM Construction Sdn Bhd and Bina Puri Holdings Bhd will build the terminal.

Wanting to consider MAHB’s proposal for the aerobridges bodes well for the renewed friendship between the two which had a nine-year spat.

“We had a good meeting with MAHB recently and things are progressing the right way. We should finally, after 11 years, have a terminal that will propel our growth,’’ Fernandes said.

The new LCCT is an important step for the industry. Even though its construction has been delayed from its original completion date of 2011, Fernandes is no longer furious.

To him, an airport with better facilities and amenities is worth the wait. In the interim, the existing LCCT terminal will be extended to cater for growth.

“I think, after nine years, we have seen some good cooperation between us and huge economic benefits. We have discussed with MAHB the development of permanent LCCTs at Kota Kinabalu, Kuching and Penang. We also intend to use Langkawi much more.

“The next three to four years looks exciting for us. With the airport development, we expect to see tremendous growth potential. The new airport will make KLIA a premier hub in Asia and that augurs well for our business.”

MAHB managing director Tan Sri Bashir Ahmad could not be reached for comments.

It is unclear if the express rail link (ERL) will be extended to the new LCCT. Fernandes is proposing that KTM Bhd consider linking the new LCCT with its current network to give an alternative to travel from the north to south of the peninsula and at the same time, promote tourism.

By B.K.Sidhu

The Star

AirAsia celebrates the Spirit of Merdeka with Low Fares!

25 August 2010

Domestic fares from RM9* and international fares from RM29*

AirAsia, the leading and largest low cost carrier in Asia has more low fares coming your way with its Merdeka Sales campaign. Fares start from as low as RM9* to domestic destinations and from RM29 to international destinations. The Merdeka campaign is a tribute to all Malaysians in achieving 53 years of Independence.

Ultra low fares for the Merdeka Sales are available up to 12 days from 24 August - 5 September 2010. However, low fares are on first come first served basis and is offered exclusively online. The travel period for this Merdeka Sale promotion is from 3 January 2011 to 31 March 2011.

Travel from Kuala Lumpur to Langkawi, Alor Setar, Johor Bahru, Penang, Kota Bharu and Terengganu from RM29*; and to East Malaysia from as low as RM49*. Select from exciting destinations and sexy getaways such as Siem Reap, Bandung, Jakarta, Krabi and Saigon from RM69*, while many other destinations throughout China are also on sale with value-for-money fares.

Alongside the Merdeka Sale which runs up to 5 September, AirAsia is also holding a special Merdeka Sale for Indian destinations which is available for booking from 24 August - 12 September for the same travel period of the Merdeka Sale as well. Enjoy low fares to cities such as Bangalore and Hyderabad from as low as RM149*, while fares for Kolkata, Kochi, Hyderabad, Trivandrum, Trichy and Chennai (from both Kuala Lumpur and Penang) starts from RM199*.

Kathleen Tan, Regional Commercial Head, AirAsia Berhad said, "This is a month of celebration, both for our guests and AirAsia as well, as it is the Merdeka month for Malaysia and for AirAsia. It is a dual celebration as the airline is gearing up towards achieving our 100 millionth guests soon. AirAsia has been synonymous with its low fares and liberating air travel and we have always strive for the best and have been innovating products and services from time to time for the benefit of our loyal guests."

To further add value to our campaign, AirAsia X is also offering its destinations for the Merdeka Sale with fares from as low as RM199* to China (Tianjin), Taiwan, India (Delhi, Mumbai), from RM249* to Australia (Gold Coast, Melbourne,) and from RM699* to London. Guests may take this opportune deal to travel early next year for an adventurous or leisure trip across South East Asia and beyond with Kuala Lumpur as the gateway hub.

Azran Osman-Rani, CEO of AirAsia X commented, "We are proud of our country and having to celebrate Malaysia's 53 years of Independence proves how far we have strived thus far together as a nation. AirAsia X is no stranger in the Malaysian business scene, and we pride ourselves as being part of 1 Malaysia. Without the rakyat, we would not be where we are today. We thank the rakyat for their support and there's no other way than to offer our continuous low fares to our guests, in light of the Merdeka spirit. Guests may take this opportunity to plan for their next year travel and make use of both AirAsia and AirAsia X vast route network for a fantastic holiday venture over 132 routes to 70 hot destinations."

To add value, offers a selection of more than 70,000 hotels worldwide apart from personalized tour packages with unbeatable prices. Log on online and find out more on the various tour packages that will suit every budget.


Low dividend payout by AirAsia if any

24 August 2010

PETALING JAYA: While analysts approve of AirAsia Bhd’s move to pay dividends, they expect the dividend payout will not be significant yet.

The budget carrier, which has been listed since 2004, do not have a dividend policy. However, the group is now considering to pay dividend to its shareholders.

HwangDBS Vickers Research said that although the dividend payment was positive for AirAsia’s shareholders, it did not expect yield to be attractive, considering AirAsia’s huge capital commitment as it was still at its expansion phase.

A local analyst said although AirAsia could afford to start paying dividend, it need not do so as no one expected the airline to pay dividend.

“Its cashflows are okay but the questions is not about the decision to pay, but by what quantum. It (quantum) makes a difference, for example paying one sen – which still constitutes a dividend although it’s not material – and a payout which gives a decent yield such as 10 sen,” he added.

A bank-backed analyst concurred that AirAsia could afford to pay dividend based on its current cashflow but it would not be as significant yet. He added that investors could invest in dividend stocks such as British American Tobacco if dividend was what they were after.

“AirAsia is a growing company. Investors invest in AirAsia for its growth story. They could pay half a sen to one sen in dividend and it may be more symbolic in the next three years,” he added.

The analyst also said AirAsia needed to restructure its Thai and Indonesian units as both were currently leveraging on its balance sheet.

Another analyst said AirAsia was currently on an expansion phase and would required large capital commitment. Hence, its dividend yield would not be as attractive.

“I don’t think it will be that much. In terms of yield, it may not be that attractive,” she said.

Yesterday, a local daily reported group CEO Datuk Seri Tony Fernandes as saying the group was planning to propose a dividend policy by the third quarter of this year.

AirAsia has been mulling over a dividend for some time. In June, Fernandes said AirAsia was in a much better position to consider paying dividends to its shareholders after solving some issues within the group.

Although it has announced its intention to pay its maiden dividend, the carrier has not given any indication on when the first payout will be.

As at June 30, AirAsia has a short and long-term borrowing of RM7.58bil and a deposit, bank and cash balances of RM858.1mil.

“The borrowings are mainly in the form of term loans which are for the purchase of new Airbus A320-200 aircraft,” it said in notes accompanying its latest quarterly results.

For the quarter ended June 30, AirAsia posted a net profit of RM198.9mil for the three months to June 30, a 43% jumped from RM139.2mil in the previous corresponding period, on a turnover of RM940.6mil.

By Leong Hung Yee

The Star

AirAsia says hello to Hat Yai with inaugural flight from Kuala Lumpur

20 August 2010

AirAsia, the world’s best low-cost airline celebrates its inaugural flight to Hat Yai from Kuala Lumpur signifying AirAsia’s final connection to South Thailand with a 90 percent flight load.

Kathleen Tan, Regional Commercial Head, AirAsia says: “There has been a demand for AirAsia to connect Hat Yai to Kuala Lumpur, and we are excited to fulfill this demand of an unserved market. AirAsia is the only airline to connect Hat Yai direct from Kuala Lumpur with daily flights. This new route was opened for sale recently in June, and the response has been encouraging. With AirAsia’s vast network and excellent connectivity, travelers from Hat Yai can now connect all over the world via AirAsia’s regional hub in Kuala Lumpur to all ASEAN countries, China, India, Australia and Europe with ultra low fares. It will also be more convenient for frequent travelers to Hat Yai to fly instead of driving long hours, which will translate into more time for shopping and sightseeing at Hat Yai.”

“This route adds another significant milestone for us as it is AirAsia’s final connection to South Thailand, which reiterates our commitment to expand the ASEAN market. We recently completed our network to all ASEAN countries from Kuala Lumpur in July with our newly launched Kuala Lumpur to Yangon flight. With this new addition, AirAsia now has a total of 140 flights weekly from Kuala Lumpur to Bangkok, Chiang Mai, Krabi, Phuket and now Hat Yai,” Tan added.

AirAsia’s Thai affiliate, Thai AirAsia also flies to Hat Yai from Bangkok with 4 flights daily.


Flights From Departure / Arrival Flight No Frequency

KUALA LUMPUR – HAT YAI 1145hrs / 1200hrs AK 770 Daily

HAT YAI – KUALA LUMPUR 1235hrs / 1445hrs AK 771 Daily


Aviation: AirAsia retires the last Boeing

20 August 2010

As from today, AirAsia flies entirely Airbus aircraft. The airline says that using single make - with as few models as possible - increases efficiency in a number of ways:

- crew do not need to be trained on multiple aircraft types - a substantial cost for carriers with a mix of e.g. Boeing and Airbus and a range of different models and configurations

- the stock of spares required is much reduced, thereby cutting overhead and the risk that stock will become redundant and therefore significantly reduce in value

- servicing is cheaper: maintenance crews do not have to be trained on multiple aircraft and work more quickly because they work exclusively on one kind of plane.

AirAsia group inherited a mix of aircraft when it took over the airlines that became AirAsia Indonesia and AirAsia Thailand.

The Chief Officers' Network Aviation

AirAsia Q2 net profit 43% up on higher passenger load

19 August 2010

PETALING JAYA: AirAsia Bhd’s net profit jumped 43% to RM198.9mil for the second quarter ended June 30, from RM139.2mil a year ago, on the back of strong growth in passenger volumes, ancillary income and higher average fares.

Its revenue for the quarter was 26% higher at RM940.6mil from RM747.9mil a year ago. It reported earnings per share of 7.2 sen versus 5.9 sen a year ago.

For the six months ended June 30, AirAsia posted a net profit of RM423mil on revenue of RM1.82bil.

While AirAsia posted a record quarter, Malaysia Airlines posted a net loss of RM535mil due mainly to derivative losses from its fuel hedges. MAS’ revenue stood at RM3.2bil for the quarter ended June 30.

In a teleconference yesterday, group CEO Datuk Seri Tony Fernandes was confident of a strong second half for AirAsia. He sees a tremendous upside for its operations in Thailand and Indonesia while its ancillary income registered massive growth.

“Forward bookings are looking very good, The fourth quarter is traditionally our strongest quarter. To head into our strongest season on the back of a soaring first quarter and a record-breaking second quarter puts us in a fantastic position,” he said.

During the second quarter, the group’s core operating profit for the period was RM168.5mil, a 31% increase over RM128.4mil core operating profit achieved a year ago.

The core operating profit margin for the period was at 17.9%, 0.7 percentage point higher than the 17.2% core operating profit margin achieved a year ago.

“There were no unrealised translation gains in the quarter as gains from the slight strengthening of the ringgit were offset by losses from the change in the fair value of currency derivatives,” it said in the notes accompanying AirAsia’s financial results.

Commenting on its ancillary growth, Fernandes said: “We have actually reached our target of RM40 spending per pax that we set for the last quarter. We have unearthed a gushing revenue stream that can boost the bottom line and also serve as a buffer to rising fuel prices.”

He said baggage fees and AirAsia Cargo were significant contributors to ancillary income for the group.

Meanwhile, AirAsia’s associates Thai AirAsia Co and Indonesia AirAsia recorded good performance in the second quarter.

“Indonesia AirAsia has staged a strong turnaround and we expect greater things,” Fernandes said, adding that passenger volume grew by 10% year-on-year to 947,786 from 863,440 last year.

In the second quarter, Thai AirAsia recorded a net profit of RM4.9mil on revenue of RM267.4mil while Indonesia AirAsia’s net profit rose to RM39.6mil on revenue of RM233.2mil.

During the quarter, the group carried a total of 6.07 million passengers while the load factor increased to 77% from 75% in the same period last year.

Fernandes said its cost per average seat per km (ASK) of 3.62 US cents was mainly due to higher average fuel cost. He said the average fuel price in the second quarter was US$100 per barrel against US$60 a barrel in the same period last year.

However, its revenue ASK grew by 26% to 4.88 US cents in the second quarter from 3.87 US cents perviously. “I think we remained prudent with hedging, but it’s very useful too – that we’re not trying to bet where the market’s going, we’re just trying to match our forward sales with our oil hedging,” he said when asked on its hedging status.

Fernandes said its net gearing was expected to improved after the deferment of aircraft in 2011. “We have deferred seven A320s for 2011 to 2015. We are planning to reduce aircraft deliveries to 10-12 from 2012 onwards,” he said. He expected AirAsia’s gearing ratio to be below two times from 2011 onwards.

On aircraft financing, he said the financing for all the aircraft in 2010 was secured. As of June 30, the group has a total of 85 planes. Of the total, 50 planes are for Malaysian operations, while Thailand has 20 and Indonesia 15.

Fernandes was confident that the group’s cash balance would surpassed RM1bil by year-end. It has a current cash balance of RM858mil.

“We’ll easily surpass that by year-end. We will be getting re-payment from our associates in Thailand and Indonesia.” He added that with the listing of associates, the amount due from associates could potentially be converted to new shares to maintain shareholding in Thai AirAsia and Indonesia AirAsia.

“It is very premature for me to comment. We believe we have a very strong brand in Thailand. We are not duly concerned. We are not focusing on our competitor, but ourselves,” Fernandes said when commenting on Tiger Airways’ venture into Thailand.

Analysts contacted said AirAsia’s strong performance was above their expectation.

“They (AirAsia) did superbly despite the significant rise in the fuel bill due to the higher oil prices. And that’s largely thanks to the strong growth in ancillary income which sort of ‘offset’ the higher fuel expenses. The deferment of aircraft significantly reduces the debt burden, and should contribute positively to earnings via lower financing costs and better yields through higher loads,” an analyst said.

Another analyst said AirAsia’s operational numbers look very good and were slightly above his expectations.

By Leong Hung Yee

The Star

AirAsia reports 'record' 2Q results; SpiceJet up 20% in Jul-2010; Skymark holiday traffic soars 35%

19 August 2010

AirAsia, the Asia Pacific region’s largest LCC, has proven its staying power in a slow but recovering market in 2Q2010, turning in what it describes as a "record quarter" for second quarter revenues. The carrier commented that the result builds on the “momentum of its first quarter profits” and sets the stage for a “potentially dynamic” second half.

AirAsia reported a 43% increase in net profit in the second quarter (three months ended Jun-2010) to USD63 million, and a 25.8% gain in revenue to a record USD299 million, as a recovering economy boosted passenger traffic (+11% to 3.9 million for Malaysian operations), load factors (+2 ppts to 77%) and average fares (+8% to USD54.70). Profit before tax rose a more modest 4%, while EBTIDAR was up 9%.

AirAsia shares have risen by 24% since the start of the year, below Tiger Airways' 26.5% rise but outperforming the Malaysian benchmark KLSE's 8.3% increase. The carrier’s shares were down 1.8% ahead of the result.

In other AirAsia news, the LCC confirmed it is working with Sovico Holdings Joint Stock Company to develop a suitable structure for the proposed venture in Vietnam. It includes the option of AirAsia initially providing operational and management services to Vietjet Aviation Joint Stock Company for a prescribed period before an investment is made.

SpiceJet handled 540,000 pax in Jul-2010; load factor of 77%

Meanwhile, shares in SpiceJet slipped 0.3% yesterday. On the same day, the Indian Ministry of Civil Aviation reported that SpiceJet witnessed a 20.3% increase in domestic passenger numbers in Jul-2010 to 540,000, to be the fourth largest carrier in the domestic market, behind KingfisherJet Airways (782,000, +14.8%) and Air India (708,000, +21.6%). Overall domestic passenger numbers increased 13.5% to 4.1 million. SpiceJet load factors stood at 76.8% in the month. (815,000, -1.7%),

IndiGo receives approval to purchase 150 aircraft

In other Indian news, non-listed LCC, IndiGo, reportedly received approval from the Indian Government to purchase 150 aircraft over the next two to three years to be used on international services. The carrier will have completed five years of operations in Aug-2011 making it eligible to launch international services.

Tiger Airways shareholders sell SGD125m in shares

Meanwhile, Tiger Airways shareholders sold approximately SGD125 million (USD93 million) in the carrier’s shares, at a price of SGD1.90 per share. CEO, Tony Davis, Ryanasia Ltd and Indigo Partners LLC sold 65.8 million shares combined. Shares in the carrier slipped 1.0% yesterday.

Skymark pax soar over peak summer period

Meanwhile, Skymark shares soared 6.0% yesterday. The carrier witnessed a 35% jump in domestic passenger numbers over the peak summer vacation period, between 06-Aug-2010 and 15-Aug-2010, to 129,489 passengers, despite overall passenger numbers slipping 1% to 2.7 million.

Source: Centre for Asia Pacific Aviation, Yahoo! Finance & Reuters