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  • PAL, Air Asia cancel 300 flights for Apec

    PAL, Air Asia cancel 300 flights for Apec

    The country’s flag carrier Philippine Airlines (PAL) and Air Asia Philippines cancelled nearly 300 domestic and international flights in anticipation of disruptions in runway operations on the week of the Asia-Pacific Economic Cooperation (Apec) Summit.

    In an advisory, PAL announced it was grounding 115 domestic and 96 international flights from Nov. 15 to 20 “to give way to the arrival and departure of Apec leaders.”

    The Manila International Airport Authority (MIAA) had announced periods of temporary runway closure at the Ninoy Aquino International Airport as part of the protocol for the arrival and departure of world leaders.

    Heads of state are expected to arrive on Nov. 16 and 17 for the summit which will be held on the 18th and 19th. They are expected to leave Manila on Nov. 19 and 20.

    “PAL assures affected passengers that the airline will reschedule their flights with rebooking and penalty charges waived,” the advisory said.

    Likewise, passengers with confirmed flights on Nov. 15, 16, 17, 18, 19 or 20 have the option to rebook within 30 days from their original schedule “for as long as the new schedule falls within the ticket validity period.”  They can also refund the full  ticket cost.

    PAL said that it may cancel more flights depending on the flight movements of the heads of state attending the summit.

    Meanwhile, Air Asia cancelled 74 domestic and 10 international flights from Nov. 17 to 20, also to give way to the arrival of heads of state.

    The airline gave passengers on the cancelled flights the option to rebook within 30 days of the date of their original flight schedule or get a refund.  Affected flyers may also avail of a credit shell within 90 days of the cancelled flight.

    A credit shell, according to Air Asia, is “a credit account where monies paid towards a booking  are stored.” The number issued, which is practically the booking number, in a credit shell account that may be used by passengers to transfer flights.

  • AirAsia India Rolls Out Promotional Fares Starting Rs 1,269

    AirAsia India Rolls Out Promotional Fares Starting Rs 1,269

    Budget carrier AirAsia India has yet again rolled out a promotional fare scheme, offering tickets as low as Rs 1,269 (all-inclusive). The offer ends on November 8, 2015 and is applicable on travel between January 15 and April 30, 2016.

    Under this AirAsia offer, tickets on Bengaluru to Kochi route are priced from Rs 1,269 (all-inclusive). Tickets on Bengaluru to Goa route is priced from Rs 1469 and Bengaluru to New Delhi at Rs 3,469.

    Its parent AirAsia is also offering fares starting from Rs 3,399 (all-inclusive) on overseas routes as part of a separate promotional scheme. This offer is open till November 8. For example, tickets from Kochi to Kuala Lumpur are priced from Rs 3,399.

    Many airlines have come up with promotional fares to tap the festive season demand.

    Air India’s offer christened ‘Diwali Dhamaka’ is valid till November 7 for travel between January 15 and April 15, 2016. Earlier, SpiceJet had also come up with ‘Diwali Sale’ with fares staring at Rs 749 (base fare-excluding taxes) for domestic sector and from Rs 3,999 (all-inclusive) on international sectors.

    Airlines have rolled out many promotional fares this year on the back of a sharp fall in oil prices. Domestic airlines in the first nine months of this year – January to September – have carried 590 lakh passengers, a growth of 20 per cent.

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  • Sydney hosts Indonesia AirAsia X

    Sydney hosts Indonesia AirAsia X

    Sydney Airport has welcomed low-cost carrier Indonesia AirAsia X for the first time, as the airline launched its five-weekly Sydney-Bali (Denpasar) service.

    “We’re pleased to welcome Indonesia AirAsia X to Sydney, providing more choice for Sydneysiders travelling to Bali, as well as greater connectivity to Indonesian and Asian destinations from the airline’s Bali hub,” Sydney Airport managing director and chief executive officer Kerrie Mather said.

    “We’re thrilled that Sydney Airport is now the world’s leading low-cost long-haul airport, with five international low-cost long-haul carriers.”

    Bali is Australia’s largest outbound leisure market. Around 416,000 Australians travelled from Sydney to Indonesia in the 12 months to July 2015, an increase of eight per cent on the prior corresponding period.

    “More than 555,000 passengers travelled between Sydney and Indonesia in the past year, and this new service will significantly increase capacity to one of Sydney’s favourite travel destinations in time for the summer holidays,” Ms Mather said.

    Indonesia AirAsia X CEO Dendy Kurniawan, who touched down in Sydney on the inaugural flight, operated by an A330-300 aircraft, said that Australia is an important market to Indonesia AirAsia X and the airline is committed to further strengthening its presence in Australia.

    “We are delighted to serve direct flights between Bali and Sydney, providing Sydneysiders the opportunity to explore Bali and beyond at affordable fares. From Bali, our guests can fly onwards to many exotic destinations within Indonesia such as Jakarta, Bandung, Surabaya and Yogykarta,” Mr Kurniawan said.

    Indonesia AirAsia X is the fourth airline servicing the Sydney-Bali route

  • AirAsia Japan granted Air Operator’s Certificate

    AirAsia Japan granted Air Operator’s Certificate

    AirAsia Japan Co., Ltd. (CEO: Yoshinori Odagiri) recently announced that the airline has been granted the Air Operator’s Certificate by the Civil Aeronautics Act by Ministry of Land, Infrastructure, Transport and Tourism, under the air transport business, Japanese Aviation Law Article 100.

    AirAsia Japan is scheduled to commence operations from their base at Chubu Centrair International Airport in Aichi prefecture to Shin-Chitose Airport in Sapporo, Sendai Airport in Sendai and Taiwan Taoyuan International Airport in Taipei in Spring 2016.

    AirAsia Group CEO Tony Fernandes said, “We are very excited to be back in Japan. We have fantastic partners here and we are united in the vision to change the way people travel in Japan. Centrair Airport is a fantastic base and with our new routes, we look forward not only to enable the Japanese to enjoy our direct destinations but to connect them to the rest of Asia and beyond on our extensive network.”

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  • AirAsia to revive Davao-Clark

    AirAsia to revive Davao-Clark

    Around two years since Davao-Clark flights were suspended, the budget airline Philippine’s AirAsia is gearing up to revive the route, a tourism officer said.

    Arwin Lingat, provincial tourism officer of Pampanga, said that AirAsia is working out to offer again the Davao-Clark, Pampanga flights.

    “Though it is still up for confirmation, there are plans to revive the flight from Davao-Clark and vice versa,” he said.

    He also pointed out that Davao-Clark Pampanga route has a big chance to be revived especially now that AirAsia inked an agreement with Davao tourism industry sector last September 30, 2015 during the recently-concluded 16th National Convention of the Association of Tourism Officers of the Philippines (Atop) in SMX Convention Center, Lanang, Davao City.

    Davao City Tourism Operations Officer Lisette Marquez, for her part, said that the signing of agreement with Air Asia for a special arrangement for Meetings, Incentives, Conventions and Events or Exhibitions (Mice) participants would mean an easier arrangement with no fee if the ticket holder wants the fare be upgraded or rebooked.

    The partnership between the city and Air Asia was signed during the formal launching of Mice Davao Program. The program is aimed to signify the city as a potential Mice destination in the country.

    In a report last 2013, budget airline Philippine’s AirAsia announced it will temporarily stop servicing the route starting October 9. The airline said the suspension was made to cushion the impact of losses made by its affiliate Zest Airways following the suspension order imposed by Civil Aviation Authority of the Philippines (Caap) last August 16, for safety violations.

    “The temporary suspension is primarily to manage costs following the recent grounding of Zest Air by Caap. This has affected many factors and allocating necessary resources such as aircraft and crew critical to ensure its recovery,” the airline said.

    Among the violations committed by Zest Air, as cited by Caap, were the series of occurrences like fuel overflow that affected several flight operations, refueling with passengers on board, excessive flight duty time of pilots, and failure to present an airman license during ramp inspection.

    Air Asia holds around 49 percent share in Zest Air.

    Flights from F. Bangoy International Airport, Davao City to Clark International Airport in Clark, Pampanga, is at four times a week.

    The airline route was suspended only after over a year of operations.

  • Indonesia AirAsia Will be No More

    Indonesia AirAsia Will be No More

    Indonesia AirAsia airline will end its operation in Indonesia as it will be merged with Indonesia AirAsia X. Suprasetyo, director general for air transportation at the Transportation Ministry, said this merger is to improve Indonesia AirAsia’s financial condition.

    According to Suprasetyo, the merger is to save Indonesia AirAsia from having its operating license revoked because by merging with AirAsia X, Indonesia AirAsia’s equity will not be negative. “Indonesia AirAsia X’s equity is not negative because it hasn’t been audited and its operation is still less than a year,” he said on Wednesday.

    Therefore, said Suprasetyo, after the merger, there will be no more Indonesia AirAsia. All AirAsia’s operations in Indonesia are under Indonesia AirAsia X that serves medium and long-distance flights. For that, Indonesia AirAsia X will submit new business plans and process route permits again so that they can use Indonesia AirAsia’s routes. “Indonesia AirAsia is no more,” he said.

    Indonesia AirAsia is one of 13 airlines that have negative equities, based on the Transportation Ministry’s inspection in July 2015. The ministry threatened to revoke their operating licenses if their equities were not positive until September 30.

    Indonesia AirAisa president director Sunu Widiyatmoko gave no answer when asked for confirmation, while PT Indonesia AirAsia X chief executive officer Dendy Kurniawan did not comment much and chose to wait for an official announcement from the ministry.

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  • AirAsia Now Offers Tickets at Rs 1,290 All-Inclusive

    AirAsia Now Offers Tickets at Rs 1,290 All-Inclusive

    AirAsia India has come up with yet another promotional offer and is offering tickets for Rs 1,290, inclusive of taxes.

    The travel period to avail the AirAsia offer is between January 15, 2016 – April 14, 2016 and tickets must be booked by September 27, 2015.

    While tickets from Bengaluru to Goa or to Kochi are available for Rs 1,290, fares from the IT capital to Delhi are priced at Rs 3,490. The AirAsia promotional offer is valid across its flying network.

    Airlines have been announcing with slew of offers almost every other week in a bid to garner market share in a fiercely competitive environment.

    These promotional schemes by airlines have ensured a spike in the number of people travelling by air. Passengers carried by domestic airlines during January to August 2015 were 523 lakh as against 433.24 lakh during the corresponding period of the previous year – a growth of 21 per cent.

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  • Air Asia starts Pattaya-Macau flights in November

    Air Asia starts Pattaya-Macau flights in November

    Air Asia says it will launch on November 27 a service connecting the Thai coastal resort of Pattaya direct with Macau.

    Air Asia’s website says the low-cost airline will make one return flight per day until October 29 next year.

    Air Asia already has four return services a day between Bangkok and Macau, and one return service a day between the northern Thai city of Chiang Mai and Macau.

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  • AirAsia flying high again

    AirAsia flying high again

    AirAsia Bhd has been facing strong headwinds lately. The budget carrier’s share price has been on a roller-coaster ride over the past couple of months, fluctuating dramatically.

    The airline’s shares have been under pressure for some time and plunged to 78 sen on Aug 26. Its share price has since rebounded sharply from that recent low, with analysts calling it an overshooting of its price during the selldown. AirAsia became a penny stock at the end of last month and stayed below the RM1 mark for about two weeks. Its share price has since rebounded, closing at RM1.31 yesterday.

    Year to date the counter has lost more than 50%.

    What triggered the quick recovery?

    Analysts say the recent selldown was overdone and the market has ignored the significant value of its portfolio comprising non-airline businesses within the group. In addition, they note that AirAsia’s fundamentals are intact and it is undervalued.

    Maybank Investment Bank Bhd analyst Mohshin Aziz concurs that the selldown was overdone and maintains a “buy” call on AirAsia with a target price of RM2.05.

    “It is a highly beaten down stock. Given the situation, it is the highest candidate (to be picked up by investors),” he tells StarBizWeek.

    Mohshin notes that AirAsia has been very active this year engaging the investment community by having meetings, teleconferences and so forth but to no avail as it shares continued to be beaten.

    “AirAsia is cheap. Cheapest in its history in US dollar terms and also the cheapest airline stock in the world currently,” he says.

    Mohshin says there is no point talking about valuations of AirAsia, as it is beyond fire sale.

    “We derived an alternative and tangible valuation methodology for AirAsia, given that the conventional ones are gaining no traction. We took the latest available appraised value of its fleet, net off its long-term debt and times it by the ringgit at RM4.3 to the dollar and we get an intrinsic value of RM1.34 per share. Basically, the metal value of the business is higher than the current market capitalisation.

    “Shareholders can make a nice 18% gain by just selling off the fleet whilst keeping the RM4.8bil of equity,” he remarks.

    It is worth noting that the US-based Wellington group of companies which had reduced their stakes in the low-cost carrier in June this year have started buying shares in AirAsia.

    According to the latest filings with Bursa Malaysia, Wellington Management International Ltd has 200.74 million shares, or 7.214% stake in AirAsia. Wellington Management Global Holdings Ltd has an indirect 228.19 million shares or 8.2% stake, while Wellington Group Holdings LLP has an indirect 278.99 million or 10.025% stake.

    The Employees Provident Fund (EPF) had on Sept 3 acquired 2.498 million shares in AirAsia but it disposed 892,500 on Sept 9.

    “AirAsia took a beating but it is now a V-shape recovery. Wellington and EPF are back. They have been buying and hopefully the worst is behind for AirAsia. The counter has been attracting high trading volume,” an analyst say.

    The turbulence comes not in just its shares being sold down. AirAsia is also battling with other issues such as the report by accounting research firm GMT Research that raised questions about related party transactions. GMT Research had highlighted problems with the company’s accounting practices and raised concerns regarding the firm’s cash flow, leverage and group structure.

    News that PT Indonesia AirAsia (IAA) may be shut down by the end of July also caused a panic among investors.

    AirAsia’s 49%-affiliate IAA has received a letter from Indonesia’s Transport Ministry laying out terms for it to ensure a positive equity position by July 31.

    Indonesia’s Transport Ministry has ordered 13 airlines to raise funds to reach positive equity positions out of concerns that a negative equity would affect safety oversight.

    Futhermore, the company’s latest quarterly results provided little cheer to investors. In the first six months to June 30, AirAsia’s net profit fell to RM392.36 mil from RM506.87 mil a year ago, with a relatively flat revenue of RM2.6bil.

    AirAsia is also battling the Malaysia Airport Holdings Bhd (MAHB) over its operations at KLIA2. It was reported that AirAsia and MAHB would be having a “peace dinner” at the end of the month to resolve their disputes.

    Analysts, however, are not too optimistic that their differences could be resolved over a dinner. “One dinner cannot bury the hatchet. We will just have to wait and see,” one analyst says.

    Analysts believe that another concern weighing down AirAsia is the continued weakening of the ringgit against the strong greenback as about 70% of operating expenses and 80% of debt are US dollar-denominated. So far this year, ringgit has weakened by about 20% year-to-date.

    “We believe that one overhang over AirAsia’s share price performance year-to-date is the weakening of the ringgit against the US dollar.

    “We estimate that 64% of operating expenses (jet fuel, MRO and aircraft leasing) are US dollar denominated. As 8% of operating costs are hedged to reduce the impact from US dollar over ringgit volatility, the impact of every 5% drop in the ringgit equals to an increase in operating cost by 3%. Separately, 73% of its US dollar borrowings are hedged,” MIDF Research says.

    At 50%, jet fuel constitutes the largest operating cost component for AirAsia.

    AirAsia’s exposure to spot jet fuel is 49% in fourth quarter 2015 (51% hedged) and 100% in FY16 (fully unhedged). Thus, the impact on a 5% drop in jet fuel price reduces operating cost by 1.2% in fourth quarter 2015 and 2.5% in FY16.

    MIDF Research also notes that daily short value on AirAsia has reduced from a daily average of RM706,000 in the first week of September to RM335,000 in the second week of September.

    “This is also a major improvement from RM1mil to RM2mil average seen in previous months. We also believe that short sellers have been covering their positions by buying back the stock as share price rose 60% off its 77 sen low, typical in a short-squeeze situation,” it says.

  • AirAsia’s Indonesian affiliate plans debt-to-equity conversion

    The Indonesian affiliate of Malaysian budget carrier AirAsia Bhd is planning to convert debt into shares to meet a new government rule on equity.

    The debt will be converted into preference shares which carry no voting rights, Sunu Widyatmoko, President Director of PT Indonesia AirAsia, told Reuters in a text message.

    He declined to disclose the amount to be converted as it is pending approval from the Indonesia investment coordinating board.

    Indonesia AirAsia is among several airlines that have until Sept. 30 to meet Indonesia’s “positive equity” rule after the country’s transport ministry extended the deadline from July 31.

    The ministry previously said 13 airlines had “negative equity” – meaning assets used to secure loans were worth less than the outstanding balance of the loans. It said those airlines risked suspension if they did not turn equity positive.

    AirAsia shares jumped as much as 5.4 percent in early trade, outperforming the benchmark index which was down 0.6 percent.- Reuters

  • AirAsia on track with turnaround plans

    AirAsia on track with turnaround plans

    AirAsia group is on track with its turnaround plans and fund raising exercise for both Indonesia and Philippines units, according to Public Invest Research.

    It said on Friday yield is expected to improve towards the end of the year and the low-cost carrier is positive on 2H performance due to seasonally stronger quarters and capacity reduction by Malaysia Airlines.

    “We reiterate our Outperform recommendation and price-to-earnings based target price of RM1.88, pegged to 10 times FY16F EPS (20%-discount).

    “Our target price implies 98.1% potential upside from current level,” it said.

    At current share price, AirAsia is trading at 2016F price-to-book value of 0.46 times and at a compelling PE ratio of 4.0 times, which is at its lowest four-year historical PER.

    “We believe in AirAsia’s future performance based on positive fare trend, strong growth in ancillary income, lower fuel prices and strong brand name within Southeast Asian market,” said the research house.

    To recap, Public Invest Research met the investor relations team of AirAsia for updates on its operation and outlook in 2HFY15.

    Indonesia AirAsia (IAA) is considering the option of issuing non-voting reedemable and convertible preference shares (RCPS) to deal with its negative equity position with the conversion of part of its receivables.

    “Nevertheless, the discussions with the existing shareholders is still ongoing, and expected to complete by end of this month.

    “Meanwhile, its initial plan to issue new convertible bond of US$150mil is on track and expected to complete by end of FY15,” it said.

    Public Invest Research also  said  Philippines AirAsia’s (PAA) board on July has approved for a new equity injection of 5bil pesos (US$110mil) and also agreed on the plans on issuing new convertible bonds, which the term sheets is currently being drafted.

    Indonesia will be removing at least four to five aircraft from Jakarta, Bandung, Denpasar and Medan starting August to improve its aircraft utilisation.

    To deal with Indonesia’s floor price ruling, IAA targeted to shift c.65% of its capacity to international routes, which have a higher margin than domestic routes.

    It will also terminate its unprofitable routes such as Jakarta-Medan and Denpasar Bali-Solo, to minimise its losses.

    Philippines will be selling two of its older aircraft in Zest and in discussion for an early return of at least two older lease aircraft to third party lessors by the end-2015.

    To further improve its profitability, PAA is expected to reduce its capacity primarily from Cebu hub and redeploy it to China routes, which have a higher yield market.

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  • Thai AirAsia sets up Utapao base

    Thai AirAsia sets up Utapao base

    Thai AirAsia (FD, Bangkok Don Mueang) has set about establishing a base in Utapao with the launch of flights to Hangzhou, China on September 1. The 3x weekly charter service runs until October 24.

    Airline Route indicates the AirAsia (AK, Kuala Lumpur Int’l) subsidiary will also launch a 4x weekly service to Nanning on September 25 followed by a 3x weekly Nanchang service on September 26.

    Flights are on-board an A320-200.

    Currently, Thai AirAsia serves forty-four destinations spread across eleven countries including China, India, Macau, Myanmar, Vietnam, Hong Kong, Malaysia, Cambodia, Singapore, and Indonesia. It has four bases in Thailand, Bangkok’s Don Mueang airport, Chiang Mai, Krabi and Phuket.

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  • AirAsia launches 8th route to India

    AirAsia launches 8th route to India

    AirAsia has expanded its route network from its main base at Kuala Lumpur (KUL) with the addition of a new service to Goa (GOI) in India. The thrice-weekly service (Tuesdays, Thursdays and Saturdays) on the 3,360-kilometre route launched on 27 August and will be flown by the carrier’s A320s. The route is not served by any other carrier.

    Goa becomes AirAsia’s eighth route to India as it already serves Bengaluru, Chennai, Hyderabad, Kochi, Kolkata, Tiruchirappalli and Visakhapatnam. In total AirAsia now serves 68 destinations non-stop from the Malaysian capital.

    For Goa Airport this is the sixth international destination served after Doha (with Qatar Airways), Dubai (Air India), Kuwait City (Air India), Muscat (Oman Air) and Sharjah (Air Arabia).

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  • AirAsia bags gold at Putra Brand Awards 2015 for 6th consecutive year

    AirAsia bags gold at Putra Brand Awards 2015 for 6th consecutive year

    AirAsia Bhd emerged the gold recipient for the “Transportation, Travel & Tourism” category for the sixth consecutive year at the Putra Brand Awards 2015.

    The award was given to AirAsia for the airline’s continued presence as the country and the region’s leading and largest low-cost carrier.

    Elated at having bagged the award, chief executive officer Aireen Omar said AirAsia was committed to further grow its route network as the airline moves from being just a low-cost carrier to a value-carrier.

    The Putra Brand Awards was launched in 2010 by the Association of Accredited Advertising Agents Malaysia to recognise brand building as an integral business investment.

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  • AirAsia India Announces Flurry of Offers, Reintroduces Fares at Rs 990

    AirAsia India Announces Flurry of Offers, Reintroduces Fares at Rs 990

    AirAsia India on Monday introduced a flurry of offers both for domestic as well as international routes, to mark the group’s milestone of flying 300 million travellers.

    AirAsia had announced last week that it would come up with something ‘big’ to mark the occasion.

    On domestic routes, AirAsia has reintroduced its Rs 990- fare (all-inclusive) offer. This offer is valid for travel period of 15 February-31 August 2016 and to avail it tickets should be booked between August 10 and August 16.

    Under the AirAsia scheme, while tickets from Bengaluru to Kochi are priced at Rs 990, Bengaluru to Goa tickets would cost Rs 1190, and New Delhi to Guwahati tickets are available at Rs 2990.

    On overseas routes, AirAsia has put on block 3 million seats and is offering all-inclusive fare as low as Rs 3,999 for traveling to Kuala Lumpur from cities like Kochi, Visakhapatnam and Hyderabad.

    AirAsia has also introduced discounts for travel on overseas routes like Bangkok, Melborune, Sydney, Perth etc.

    Jet Airways also introduced a discount offer on Monday. Jet Airways announced a promotional scheme offering a flat 30 per cent discount on base fares of domestic flights and travel from India to international destinations.

    Fare wars between airlines have turned intense in Indian skies and carriers have been coming up with offers every other week to woo flyers.

    The promotional schemes offered by different airlines have helped spur strong passenger growth. The number of passengers carried by domestic airlines during January-June this year rose to 388 lakh, as against 324 lakh during the corresponding period of previous year – an increase of nearly 20 per cent.