Vietjet Air still grounded

14 June 2010

VietNamNet Bridge – The private airline Vietjet Air will be unable to take off as promised because it still has not completed all the necessary procedures. The airline needs to find another name for the joint venture Vietjet Air – Air Asia that can be accepted.

Vietjet Air has contacted Civil Aviation Administration of Vietnam (CAAV), requesting that it allow them to delay operation off until October 2010, because the airline needs some more time to settle problems relating to its sale, brand, personnel and fleet.

Vietjet Air previously planned to provide commercial flights under the name “Vietjet-AirAsia” after it sold 30 percent of the company to AirAsia. The name, however, is a matter of controversy. Many aviation experts claim that the name may lead to misunderstandings and travelers may mistake the air carrier for Air Asia. They also believe that the name does not reveal that this is a Vietnamese airline.

The case is reminiscent of the Jetstar Pacific case, in which the airline was told not to use the orange star and Jet logo because it could be mistaken for an Australian airline.

CAAV told Vietjet Air to rethink its brand and not to use logos and brands that might create misunderstandings.

A representative of Vietjet Air admitted to VnExpress that the biggest problem is branding. The air carrier has hired consultants to design a logo and brand, and this will take time.

“This is the main reason why we still cannot take off as planned,” he observed.

The Vietjet Air agreement to sell 30 percent to a foreign airline also raised protests. Two weeks after Vietjet Air announced the sale, Vietnam Airlines, the national flag air carrier asked the Government not to approve the deal.

According to Vietnam Airlines, AirAsia’s investment in Vietjet Air should be seen as a threat to Vietnam’s market.

According to Vietnam Airlines, with 30 percent in Vietjet Air, AirAsia will be able to join the board of directors and manage the airline anyway it sees fit.

Vietjet Air is the first private airline granted a license (in December 2007). Its two main shareholders are Sovico Group and HD Bank. The airline initially planned to begin commercial flights in late 2008. However, the airline decided to delay for four months, because fuel prices sharply increased.

In March 2009, Vietjet Air again decided on a delay to October, and then agreed to another delay for five more months, until May 2010. Due to branding issues, the airline initially reported that it would not begin operation until August. In the latest news, the airline will now not open prior to October 2010.

To date, three private airlines have been licensed to operate in Vietnam, including Vietjet Air, Indochina Airlines and Mekong Aviation. Of these three, Indochina Airlines has gradually disappeared after one year of operation.

The third private airline, Mekong Aviation also plans to provide flights in 2010. The air carrier will have 10 aircrafts to fly domestic routes, including Hanoi-Phu Quoc, Hanoi-Nha Trang, Hanoi-Can Tho.

According to CAAV, by 2015, Vietnam will have 149 aircraft and provide 33 million seats.

VNExpress

AirAsia to launch KL - Myanmar Flights; Promotional Fares from RM 29

14 June 2010

AirAsia is to launch direct daily flights to the beautiful city of Yangon in Myanmar. The new route will commence services from 20 July 2010.

To celebrate the introduction of this new route, AirAsia is offering all-in-fares between Kuala Lumpur and Yangon from as low as RM29 (US$10) one way. Booking starts from today, 14 June 2010 until 20 June 2010, for travel between 20 July 2010 and 8 May 2011. Promotional seats are limited and available on a first-come, first-served basis. Terms and conditions apply.

AirAsia’s foray into South East Asia’s largest country, Myanmar, from its Kuala Lumpur hub completes the ten countries under the ASEAN (Association of South East Asian Nations) network. AirAsia already flies to Yangon from its Bangkok hub with daily flights.

Ms Kathleen Tan, Regional Head of Commercial AirAsia said, “Myanmar will see a big boost in their tourist entries with this new direct daily flight from Kuala Lumpur to Yangon, as our guests from Europe, China, India, Australia and around the ASEAN region utilizing our Kuala Lumpur hub now has a more affordable option to travel to Myanmar. AirAsia’s affordable fares will also enable the Burmese workforce in Malaysia to return home and visit their families more often. Avid travelers and backpackers looking for the Asian experience can now add Myanmar to their list, as AirAsia’s entry into this market offers greater connectivity options from our Kuala Lumpur hub at a much lower fare.”

The city of Yangon is home to mesmerising Buddhist pagodas of diverse architectural style and structures, such as the Swedagon Pagoda, the most sacred and honourable pagoda in Myanmar, made from eight tonnes of gold and adorned with precious gems like diamonds, rubies, sapphires and emeralds. Other must-see attractions in Yangon include the Sule Pagoda, Botahtaung Pagoda, the National Races Village, National Museum, War Memorial and Yangon Zoological Garden.

Myanmar’s southern uninterrupted coastline facing the Bay of Bengal and the Andaman Sea provides beach lovers with unspoilt beaches such as the breathtaking Ngapali, Ngwe Saung (Silver Beach) and Chaungta.

This new route will be serviced by Airbus A320 aircraft with a 180 passenger capacity


AsiaTravelTips.com

AirAsia X denies it may list in HK or US

10 June 2010

AirAsia X, a Malaysian long-haul budget carrier, denied a Star newspaper report it is considering selling shares on the Hong Kong or New York stock exchanges.

“We haven’t considered the destination. There’s no size of the floatation, no adviser has been hired yet,” chief executive officer Azran Osman Rani said in a phone interview today.

“We are not in a preparation mode for listing yet.”

-- Bloomberg

EVA Air, China Airlines fall, MAS and AirAsia gain

10 June 2010

Asia Pacific airline stocks were mixed again yesterday, with Taiwan’s EVA Air (-4.0%) and China Airlines (-3.5%) weaker despite EVA’s very strong May-2010 traffic report.

EVA Air’s passenger numbers rose 18% year-on-year last month to 552,587, while passenger load factor surged 11.2 ppts to 79.3% and passenger yield jumped 20.8% to USD 6.75 cents. Cargo volumes climbed 55.8% to 75,539 tonnes and cargo yield soared 46.2% to USD 25.65 cents.

Malaysia’s AirAsia (+4.7%) and Malaysia Airlines (+5.1%) closed higher ahead of today’s unveiling of the tenth Malaysia Plan by Prime Minister Datuk Seri Najib Tun Razak.

Elsewhere, Singapore Airlines, Qantas and Cathay Pacific fell 0.4%, 1.2% and 2.8%, respectively.

See the CAPA Hot Issue page on Asia Pacific Aviation.

Asia Pacific selected airlines daily share price movements (% change): 09-Jun-2010

Source: Centre for Asia Pacific Aviation & Reuters

AirAsia X listing under study

10 June 2010

Analysts say long-haul low-cost business model not yet proven

PETALING JAYA: While the listing of AirAsia X Sdn Bhd (AAX) is deemed necessary, some analysts are still studying the viability of its business model as the long-haul low-cost model has yet to chart an established flight path.

It is also on this note that they feel AAX’s listing will have minimal impact on AirAsia Bhd. Not everybody will sell their shares in a proven model such as AirAsia’s for AAX’s relatively new model.

“The success of budget airlines has always hinged on flights not exceeding four hours. Long-haul flights mean that margins will be thinner. Efficiency is also compromised with facilities for inflight entertainment. However, as AirAsia has continuously amazed the market, I won’t be surprised if it succeeds (with AAX),” said an aviation analyst.

An RHB analyst in his report said AAX’s use of wide-body aircraft with a seating capacity of about 400 (versus 180 seats for a narrow-body aircraft) meant it was also harder to fill the plane during off-peak periods.

Nonetheless, the listing is necessary as AAX has placed orders for 17 A330 and 10 A340 aircraft, which are scheduled to be delivered progressively in the next few years.

Without an appropriate equity portion in its balance sheet, it would be difficult for AAX to secure attractive financing for these aircraft, which will cost billions of ringgit.

This listing will also see AAX eventually taking over employment of its own pilots, cabin crew and ground staff, and maintaining its own commercial and marketing teams.

Last year, AAX paid AirAsia RM57mil for a host of airline services.

This will now stop, except for the continued use of the AirAsia brand, its website and the use of the AirAsia academy and training facility.

As no breakdown was provided for these charges, it is uncertain what each service costs. The loss of revenue to AirAsia will, however, be minimal.

On the timing of the initial public offering (IPO) by the second half of 2011, analysts said this suggested that the group would put in extra efforts to churn out better financial numbers to ensure the success of AAX’s listing.

“We believe the group will keep the good news flowing to attract investors’ attention,” said an aviation analyst.

While it is still uncertain how much AAX is planning to raise from the IPO exercise, the recent IPO of budget carrier Tiger Airways on the Singapore Exchange raised S$247.7mil (RM583.5mil). Tiger Airways shares were offered S$1.50 (RM3.53), which values the company at 12.6 times price earnings ratio of its March FY2011 earnings.

AirAsia’s IPO in 2004 raised RM863mil, with its stock priced at RM1.25 for institutional investors and RM1.16 for individual investors.

“On a historical basis, we expect the proceeds to be raised by AAX would be between RM500mil and RM900mil. We believe this would be sufficient for AAX to start on its aircraft expansion,” said an analyst from MIDF Research.

AirAsia presently has a 16% stake in AAX and an option to increase it to 30%. AAX’s other shareholders are Aero Ventures Sdn Bhd (48%), the Virgin Group (16%), Bahrain-based Manara Consortium (10%) and Japan-based Orix Corp (10%).

Aero Ventures is owned by Datuk Seri Tony Fernandes, Datuk Kamarudin Meranun, Datuk Kalimullah Hassan, Lim Kian Onn and former Air Canada chairman and CEO Robert Milton.

By Tee Lin Say

The Star

AirAsia forms Koolred

10 June 2010

AIRASIA Bhd has formed a new subsidiary called Koolred Sdn Bhd that will offer a premier travel social networking website to users.

Through the website, users can build their own communities and offer each other travel advice, support and share travel information.

The directors of Koolred presently are Phua Sheau Wei and Lau Kin Choy.

The company has an authorised share capital of RM100,000.

Business Times

AirAsia launching tax-only fares

08 June 2010

Budget carrier AirAsia X is offering return fares from Australia to the UK from under $240 as part of a 48-hour sale.

The tax-only fares apply on routes across the entire AirAsia X network covering Malaysia and beyond.

The booking period for 'The World’s Best Sale' promotion runs for 48 hours only from June 9 to 10 for travel between October 11 and November 14, 2010. The online sale starts at 2am EST Wednesday June 9, 12.01am WST.

AirAsia X says the sale celebrates it's being named the 2010 World’s Best Low Cost Airline in the annual World Airline Survey by Skytrax, for the second consecutive year.

Fares include London (Stansted) via Kuala Lumpur and back from the Gold Coast from $217, from Perth from $235 and from Melbourne from $240.

These total fares to London and back to Australia are available by purchasing one way sale fares in each direction from either Gold Coast, Perth or Melbourne to Kuala Lumpur, then from KL on to the UK.

From just $10 passengers can also fly one way from Kuala Lumpur to a range of other destinations including Hangzhou, Tianjin, Taipei, Mumbai and New Delhi.

“This is undoubtedly The World’s Best Sale from the World’s Best Low Cost Airline but it’s only for 48 hours so you’ll have to get in quick,” AirAsia General Manager Australia Darren Wright said.

“Guests will have to pay only the taxes on these seats, making flying to London and back just as cheap as, or even cheaper than, a return domestic flight at home."


AviationRecord.com