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, AirAsiaGo.com 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.

TravelBlackBoard

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.

FLIGHT SCHEDULE

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

Peanuts!Online

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