Malaysia Airlines sees shift from business to economy; considering Premium Economy A380 seating

01 March 2010

Malaysia Airlines’ Senior GM Network and Revenue Management, Ain Khan, in an interview with Bloomberg, confirmed the carrier is considering introducing Premium Economy seating in its six on-order A380s, commenting that it would "provide another option for our passengers".

He added that the seating would meet the needs of "those organisations that maintain economy-class travel policy for their employees, even after the recession." According to Mr Khan, the carrier’s passenger yields are not expected to return to pre-crisis levels "just yet", even though business demand is showing signs of recovery. Shares in the carrier surged 6.7% yesterday.

Also in Malaysia, shares in AirAsia were up 0.7% yesterday, despite OSK Research continuing to caution regarding AirAsia’s balance sheet profile, which it sees as a "concern, especially considering the number of planned new aircraft deliveries". OSK Research commented, "the huge amounts owed by its Thailand and Indonesia operations together with its significant unrecognised share of operating loss also worry us”.

Tiger Airways to establish a third Asian subsidiary

Tiger Airways CEO, Tony Davis, in an interview with The Financial Times, confirmed that the carrier is planning to establish a third Asian subsidiary, commenting, “we are now actively looking at that opportunity. The timing is as soon as we can come up with an opportunity that we like, [and] do a deal with a partner that we can work with.”

Mr Davis, while not commenting on a possible location for the subsidiary, stated it would be in a country where regulations would require Tiger to set up a JV with a local partner. Tiger's shares eased 1.3% yesterday. See related report: Tiger Airways profitable in Dec-2009 quarter, as unit revenues and passenger grow. Third "cub" soon?

Asia Pacific selected airlines daily share price movements (% change): 01-Mar-2010

Source: Centre for Asia Pacific Aviation & Reuters

AirAsia increases frequency (9x weekly) to Taipei

02 March 2010

AirAsia announces today that it will increase its Kuala Lumpur � Taiwan frequency to 9 flights weekly.

AirAsia which is currently offering daily direct flights to Taipei from Kuala Lumpur is introducing the new frequency to meet the emerging demands and encouraging load factors from the ASEAN region and beyond. The additional flights will commence on 15th April 2010.

To celebrate the additional flights, AirAsia will be introducing all-in-fares from as low as RM99* (TWD990) from Kuala Lumpur to Taipei, booking starts from 1st to 5th March 2010 for the travel period from 15th April to 30th October 2010. Promotional seats are limited and available on a first-come, first-served basis and made exclusively online via www.airasia.com and mobile.airasia.com.

Following its successful launch of Kuala Lumpur – Taipei route last year, AirAsia continued to boost its international connectivity to Taipei by launching more new destinations from its hubs which include Kota Kinabalu (direct daily flights) as well as the Thai city of Bangkok (direct daily flights). These bring AirAsia’s total number of weekly flights to and from Taipei to 23.

The overwhelming demand from travelers to and from Taipei has grown tremendously since the launch of Taipei from the various AirAsia hubs for the past 1 year. Airasia is the preferred airline as its low-fares would enable guests to make the most of their trips; moreover AirAsia is the sole low-cost carrier to connect the two regions with its revolutionary low-fares. Recently, AirAsia was also named the winner of the award for outstanding contributions to Taiwan’s tourism industry over the year by actively publicizing Taiwan’s various attractions, launching of travel promotions and aggressive marketing campaigns including continuous low fare offerings that drove high travel demands and growth to the country.

Kathleen Tan, Regional Head of Commercial, AirAsia Group said: “The response has been extremely good for this route and we are running at an average of 80 percent load factor since its launch on 1st July 2009. The demand for the existing routes made it very clear for the need to introduce additional flights. The mounting of frequency is a testament to AirAsia’s commitment of making travel accessible and affordable to all. It will also provide both business and leisure travelers with more flexibility and greater choice to connect onto AirAsia and AirAsia X’s extensive route network across ASEAN countries.”

“Taiwan has always been a popular destination for holidaymakers due to its shopping and gastronomic paradise. Many Taiwanese are also interested to visit Malaysia and other cities in the region with low fares. Furthermore, with the great timing for our additional flights from Taipei and our vast network across South East Asia, Taiwanese can now conveniently connect to other long haul destinations by AirAsia X such as Australia, UK and India, via Kuala Lumpur as a gateway.” she added.

To add value, AirAsia, under AirAsiaGo at http://airasiago.com, has also lined up some great online hotel deals to stretch the dollar where they may choose their holiday lodgings from over 50,000 hotels. We encourage our guests to purchase food, baggage, hot seats online to enjoy more discounts and savings through airasia.com.

Stay tuned! Follow AirAsia on Twitter, Facebook, and AirAsia’s Blog where we will provide real time updates on our latest promotion. Photos will be available on www.flickr.com/airasia. For more details on flight times and bookings, please visit www.airasia.com or mobile.airasia.com

*All fares quoted are applicable for one-way travel only


Peanuts!Online

OSK Reseach raises AirAsia to neutral

01 March 2010

KUALA LUMPUR: OSK Research Sdn Bhd has upgraded its forecast for AIRASIA BHD []'s profit before tax by 45.2% to RM454.1 million in financial year ending December 2010 (FY10) in anticipation that the aviation firm would benefit from lower fuel cost.

In a note today, OSK analyst Ng Sem Guan said the research firm had revised downwards its jet fuel price assumption to US$85 from US$90 a barrel during the year given that crude oil rates had consolidated at around US$80 per barrel.

However, the anticipation of AirAsia operating more new aircrafts in the next few years has raised concerns on the firm's balance sheet profile.

"The huge amounts owed by its Thailand and Indonesia operations together with its significant unrecognised share of operating loss also worry us, especially, the impact of introducing FRS139 effective 1 Jan 2010," Ng said.

As such, OSK has only upgraded its recommendation for AirAsia shares to Neutral despite raising its target price by 31% to RM1.48 from RM1.13.


by Chong Jin Hun

The Edge

AirAsia Wins Taiwan’s Tourism Award!

26 February 2010

TAIPEI– AirAsia gets on a winning streak once again, when the carrier was awarded in the ‘Contribution to Taiwan Tourism’ category at the Taiwan Tourism Award 2010 ceremony, held at The Grand Hotel in Taipei today. The award was bestowed upon the airline by the Taiwan Tourism Bureau, for the carrier’s persistent contributions to the growth of Taiwan’s tourism industry, maintaining its status as one of the Asian region’s major tourist destinations.

The prestigious annual award celebration — one of the major celebratory events in Taiwan’s tourism sphere — honours tourism-related organizations which are deemed to have greatly contributed to the development of tourism activities in Taiwan. AirAsia was named the winner of the award for outstanding contributions to Taiwan’s tourism industry over the years by actively publicizing Taiwan’s various attractions, launching of travel promotions and aggressive marketing campaigns including continuous low fare offerings that drove high travel demands and growth to the country.

AirAsia Regional Head of Commercial, Kathleen Tan said, “We accept this award with full pride, as it vindicates our unremitting efforts in developing and promoting Taiwan as a haven for holidaymakers. It is indeed an immense honour to be recognized by Taiwan’s top tourism body, the Taiwan Tourism Bureau, for our contributions to the country’s tourism industry. Taiwan is one of the most important routes on our plate, and we remain committed to its growth as a major holiday destination.”

“AirAsia hopes to bring in more guests to Taiwan in many years to come, from our dedicated hubs in Kuala Lumpur and Kota Kinabalu in Malaysia and Bangkok in Thailand. This is attainable as its unique attractions, tourist-friendly facilities, shopping bargains and other varieties of leisure options puts Taiwan high on the list of our guests’ preferred travel destination. Nevertheless, we believe tourists traffic from Taiwan and its surrounding region to Asean and beyond will further increase with our low fares and fantastic deals. Guests may hop across our vast route network tapping into our hubs as a gateway to more than 70 hot destinations we fly to,” she adds.

Among the featured award categories of the evening were ‘Contribution to Taiwan Tourism’, ‘Passionate Tourism Organization’ and ‘Outstanding Theme Parks’. The nominees consisted of various local and foreign operators of tourism-related organizations such as travel agents, airlines, hoteliers and tour operators. Seated in the judging panel are travel and tourism professionals and strategists in Taiwan, who meticulously look into every criterion before deciding on eventual winners.

On AirAsia’s award win, Steven Hsieh, Deputy Director General, Tourism Bureau, Ministry of Transportation and Communications, Taiwan said, “AirAsia is given the award for its brilliant contributions to Taiwan’s tourism industry through constant efforts in promoting Taiwan’s various tourism offerings and for its part in boosting the numbers of visitors into the country. Ever since AirAsia launched direct flights into Taipei, the number of tourist arrivals increased significantly, which helps boost revenue from tourism activities. We would like to congratulate AirAsia for the award win and our appreciation goes to the airline, for all its effort in putting Taiwan in the tourism forefront.”

AirAsia operates daily flights to Taiwan from its hub in Malaysia via Kuala Lumpur (since 1 July 2009) and Kota Kinabalu (since 15 January 2010) with a total of 28 weekly flights. From Kuala Lumpur, flights are operated by low-cost long-haul AirAsia X whereas from Kota Kinabalu flights are operated by short-haul AirAsia.

From its hub in Bangkok, Thai AirAsia operates daily flights to Taiwan with a total of 14 weekly flights, with commencement of its first flight on 25 September 2009. As a group, AirAsia to date has carried over 176,000 guests into and from Taiwan.

News.Brunei.fm

Air New Zealand doubles net profits; AirAsia and Tiger Airways return to profitability in Dec-2009

26 February 2010

Air New Zealand’s shares fell 0.8% yesterday, ahead of the release of the carrier’s financial results for the six months ended Dec-2009 this morning.

The carrier reported a more than doubling of net profit in the six months to 31-Dec-2009, as the carrier reduced costs in response to declining passenger demand and yields. The carrier’s shares have fallen 2.3% in early morning trading today. The carrier’s shares have risen by approximately 9% in 2010, compared with 2.4% fall in the benchmark NZSX-50 index.

See related report: Air New Zealand doubles net profitability but warns of tougher second half conditions

AirAsia back to black in 4Q2009, but unit revenues suffer

AirAsia’s shares slipped 0.7% yesterday, despite the carrier reporting is best ever annual profit and returning to profitability in 4Q2009 (with a net profit of USD23 million and an operating profit of USD94 million), as the economic crisis boosted demand for cheaper air travel.

However, while benefiting from the economic environment, the LCC has not been immune to the effects of the crisis, reporting a 20% reduction in unit passenger revenue in the quarter. Revenue per ASK down by 18%, more than offsetting a 14% reduction in cost per ASK (to an industry leading USD 3.26 cents). Costs per ASK excluding fuel remained stable at USD 1.87 cents. See article: AirAsia profits in 2009, but times are getting tougher

Tiger Airways profitable in Dec-2009 quarter

Shares in newly-listed Tiger Airways were also weaker yesterday, down 2.0%, despite reporting a recovery in profit in the three months ended 31-Dec-2009, due to surging passenger numbers (+54% to 1.3 million) and stronger load factors (+4.6 ppts to 87.6%).

The carrier reported an operating profit of USD17 million and a net profit of USD10 million, representing a turnaround from losses of USD3.6 million and USD5.5 million in the previous corresponding period, as revenues soared 30% (to USD99 million, of which ancillaries represented 18%) and operating costs increased by only 3%.

However, the carrier’s average passenger fare was down 19% to USD62.6, although revenue per ASK increased 5.5%. Cost per ASK was down both including and excluding fuel costs, down 16.3% and 4.3%, respectively (to USD 4.19 cents and USD 2.68 - or some 29% and 43% higher than AirAsia’s unit cost results, respectively).

Air China and Cathay sign cargo airline JV

In North Asia, shares in Cathay Pacific gained 0.3% yesterday, while Air China’s shares were down 1.3%, as the carrier’s signed a Framework Agreement to establish a jointly-owned cargo airline. See article: Air China and Cathay Pacific set up Shanghai cargo JV. Chipping away the Hong Kong hub

Asia Pacific selected airlines daily share price movements (% change): 25-Feb-2010

Source: Centre for Asia Pacific Aviation & Reuters

Centre for Asia Pacific Aviation

AirAsia announces RM639.3mil pre-tax profit

25 February 2010

KUALA LUMPUR: AirAsia Bhd announced a pre-tax profit of RM639.317mil for the year ended Dec 31, 2009, a turnaround from a pre-tax loss of RM869.198mil in 2008.

In contrast to the aviation industry gloom, AirAsia Group CEO Tony Fernandes said the budget airlines’ revenue for the year was higher by 11.5% to RM3.179bil against RM2.851bil previously.

In a statement, AirAsia said its passenger growth registered a healthy 21% increase to 14.2 million in the Malaysian operations.

The combined Malaysian, Thailand and Indonesian operations carried 24% more passengers, totalling 22.7 million, it said.

Fernandes said: “We have successfully grown our market share in every market we served, opened up four new bases (Penang, Bandung, Phuket and Surabaya), launched new routes and amassed RM748mil cash in the balance sheet as a bulwark against any contingencies that may arise.”

On the operations in Thailand, Fernandes said AirAsia Thailand has captured a substantial market share and delivered a core operating profit of 334 million baht (RM34.1mil).

The Thai operation is enjoying the cost benefits of the increased number of Airbus A320 aircraft in its fleet, he said.

On AirAsia Indonesia, he said: “Indonesia is in the final stage of its aircraft renewal programme and this will help enhance operational reliability, increase capacity and substantially reduce operational cost.”

As Indonesia received more Airbus A320 aircraft, it would replicate the cost advantages in Malaysia and was on course to deliver sustainable profits for the full year 2010, he said.

Fernandes was optimistic on AirAsia’s prospects in 2010, saying: “There are early signs that the global economy is stabilising and the benefits are already visible in the aviation industry.”

The supply-demand conditions are favourable for an upward fare revision in certain sectors, he said.

”We have identified nine new routes to be launched and this will support passenger growth of 11-14% in 2010,” he said.

Based on the forward-booking trend, the underlying passenger demand in the first quarter 2010 was positive, said Fernandes.

The group is also determined to increase its penetration in the Asean region.

While it was already operating through its hubs in Malaysia, Indonesia and Thailand, AirAsia has also entered into a joint venture with VietJet in Vietnam with the goal of launching operations out of that country this year.

On fuel, Fernandes said AirAsia has partially hedged fuel requirements up to December this year.

“This will help mitigate some of the oil price volatility and we are monitoring the market and constantly assessing the feasibility of hedging further our fuel exposure in 2010 and beyond,” he added.

-- BERNAMA

Air Asia to be First Low Cost Carrier to Offer Lie-Flat Seats

23 February 2010



In order to remain competitive, Air Asia will be the first low cost carrier to offer lie-flat, first-class seats on their long-haul flight from London to Kuala Lumpur. They have recently installed 12 on their A330s and 18 on the A340s, cutting the number of passenger capacity of these flights. Don't expect anything too fancy, there will not be any five-star dining or even an entertainment center. (Air Asia will explore portable entertainment devices.) There is no exact date when the modified planes will be taking off, but Air Asia says sometimes in June. [Jaunted]

By Joseph Pedro

Passportmagazine.com