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Tag: flight

  • Garuda Indonesia Expects to Make Profit in 2018: CEO

    Garuda Indonesia Expects to Make Profit in 2018: CEO

    National flag carrier Garuda Indonesia expects to end 2018 in profit and is targeting a net profit of Rp 1 trillion ($69 million) for 2019, its chief executive said on Friday. Garuda saved $96 million by working with lessors to restructure the financing of its planes until November 2019, chief executive Ari Askhara told reporters.

    “Our net profit for 2018 is positive, even though it might be a small amount,” he said, attributing the result to cost-cutting, renegotiation of aircraft leases and new partnerships.

    The result would be a marked improvement for the airline, which reported a $116.86 million net loss for the first six months of 2018. Ari declared in September that Garuda had abandoned hopes of making a profit this year, after struggling with fuel costs and a rising rupiah versus the US dollar.

    The new partnerships include Garuda taking operational control of rival Sriwijaya Group in November, gaining a majority share of the fast-growing domestic aviation market.

    That partnership could be escalated to a 51 percent share ownership of Sriwijaya, depending upon discussion with Garuda advisors and the Ministry of State-Owned Enterprises, Ari  told a media briefing. Garuda’s profit had yet to see a positive boost from Sriwijaya, he said.

    “Garuda might also see a partnership with [Malaysia’s] AirAsia … through [Garuda unit] Citilink but it’s very early,” he said.

    AirAsia president director Dendy Kurniawan confirmed in a statement that early talks with Garuda were underway, with “various forms of cooperation to support the industry being discussed,” but noted no final decision has been reached.

    Garuda has been battling for market share against local market leader Lion Air, which in October suffered a crash of a Boeing 737 MAX jet, killing all 189 people on board.

    Ari said Garuda had 30 million passengers in 2018 and would expand its fleet to include a new Airbus SE 330neo in September 2019 and a 737 MAX jet at the end of 2020.

    New profitable routes domestically and internationally are planned for 2019, he said.

    Ari also said an intended private placement of shares from subsidiary Garuda Maintenance Facility AeroAsia to longtime partner Air France Industries KLM Engineering & Maintenance had been canceled.

    He said that he considered the current share price of GMF AeroAsia too low and wanted to increase the company’s valuation first.

    Ari said GMF Aeroasia would partner with Dunlop and China Construction Indonesia to build a tire plant in 2019, with the first stage seeing a $300 million investment from the companies involved.

    The plant would be for the domestic market and supply 50 percent of its output to Garuda, 48 percent to Lion Air and 2 percent to AirAsia Group.

    Domestic air traffic more than tripled in Indonesia over the past decade as rising prosperity and lower fares made flying affordable for more people.

    With 129 million passengers in 2017, the Southeast Asian country is the world’s 10th-largest aviation market and is projected to continue growing.

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  • MAHB’s record profits come at a cost to the Malaysian economy and tourism

    MAHB’s record profits come at a cost to the Malaysian economy and tourism

    Against a backdrop of a challenging economy and falling profitability in corporate Malaysia, Malaysia Airports Holdings Berhad (MAHB) won a major Malaysian award last week, topping billion ringgit companies for giving its shareholders the best three-year returns in its class.

    MAHB’s net profit more than tripled in 2017 to RM237 million from RM73 million in 2016 – itself nearly double from RM40 million in 2015 – and it is set to break yet another record this year.

    In the write-up that accompanied the award, the sharp increase in profits was attributed to two reasons: an increase in Passenger Service Charge (PSC) and growth in passenger numbers coming through its airports.

    The write-up unabashedly stated that MAHB owed its vastly improved performance to its structural dominance and described MAHB as a structural monopoly.

    Kudos to MAHB. But then, it is not difficult to keep showing such numbers when you are a monopoly.

    Nevertheless, unjustified price increases, such as the PSC hike imposed by MAHB, will lead to unintended consequences when its clients, who have no choice but to use its services, are eventually squeezed out of business. Then, everything will collapse – Malaysia’s tourism arrivals, billions in tourism receipts and revenues to MAHB’s own coffers (a fact it has failed to acknowledge).

    MAHB rewards itself with excessive monopoly profits, yet it provides the Malaysian public with embarrassingly low service levels.

    AirAsia X Malaysia CEO Benyamin Ismail said, “In addition to the RM50 PSC it already imposes, MAHB is now demanding an additional RM23 from each passenger travelling through klia2. The millions of passengers departing from klia2, more than 90 percent of whom fly with AirAsia, will attest to the long walks they have had to endure to reach their gates in what is a passenger-unfriendly airport with inferior facilities yet unjustified high charges.

    “Furthermore, since klia2 opened, there have been constant flight disruptions and cancellations due to major apron and runway defects, unscheduled closure of runways, ponding of water on the best of days and fuel pipeline ruptures.

    “We were sued after we refused to collect the extra RM23 that MAHB has imposed for the sole benefit of its shareholders. We will vigorously fight this suit. We will not be part of this scheme to burden the travelling public by making them pay more for below par services.”

    Benyamin added that while the operating results of klia2 itself were not immediately apparent, AirAsia estimates that MAHB’s returns on capital are well in excess of the level of the cost of capital set by regulators.

    AirAsia Malaysia CEO Riad Asmat said, “The overall tourism sector, one of Malaysia’s biggest revenue earners, and the interests of millions of Malaysians who have been able to fly because of the low fares pioneered by AirAsia, are being threatened by MAHB’s price hikes. We urge the regulators and policy makers to rebuff this unfair and unreasonable attempt by MAHB to use its monopoly to enrich itself further by revisiting and rescinding the decision to raise the PSC.

    “MAHB has argued it needs more profits to operate smaller loss-making airports on behalf of the government, but it is obvious from its exponential growth in profits over the last three years – even after taking into account losses in its Turkish operations – that this is not the case.

    “The additional RM23 to be collected will amount to more than RM100 million a year that will go straight to MAHB’s bottom line rather than to the government. MAHB will continue to be among the most profitable Malaysian companies for many years to come. But this will come at a cost to the wider Malaysian economy and at the expense of engines of growth such as AirAsia and AirAsia X.”

    Riad also referred to MAHB’s defence of its decision to charge the extra RM23 in PSC from each travelling passenger, saying it is “bound by Article 15 of the Chicago Convention of 1944.”

    “This would almost be laughable if it were not so serious. MAHB is falling back on a convention ratified in 1944, when Japan still ruled Malaya and when Frank Whittle was testing the jet engine and when only the well-heeled could fly.

    “For all these reasons, we shall not accede to MAHB’s demands and we will take our battle both to the people and to the court of law.”

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  • AirAsia: High cost of unjustified PSC hike

    AirAsia: High cost of unjustified PSC hike

    Unjustified price increases such as the hike in passenger service charge (PSC) could result in airlines being squeezed out of business and subsequently affect tourism arrivals, said low-cost carrier AirAsia. In a strongly worded statement titled “MAHB’s record profits come at a cost to the Malaysian economy and tourism industry”, the airline said the PSC hike imposed by airport operator Malaysia Airports Holdings Bhd (MAHB) will lead to unintended consequences when MAHB’s clients, who have no choice but to use its services, are eventually squeezed out of business.

    “Then, everything will collapse – Malaysia’s tourism arrivals, billion in tourism receipts and revenues to MAHB’s own coffers (a fact it has failed to acknowledge). MAHB rewards itself with excessive monopoly profits, yet it provides the Malaysian public with embarrassingly low service levels,” it said.

    The two parties have been in a row over the additional PSC imposed by MAHB of RM23 per passenger at klia2, in a move to equalise the PSC rate at klia2 and Kuala Lumpur International Airport (KLIA).

    Last week, MAHB slapped AirAsia Group Bhd and AirAsia X Bhd (AAX) with a RM36.1 million lawsuit for refusing to collect the additional PSC and alleged arrears in PSC.

    AirAsia X Malaysia CEO Benyamin Ismail said more than 90% of the “millions” of passengers departing from klia2 who fly with AirAsia will attest to the long walks to the departure gates, labeling klia2 as a passenger-unfriendly airport with inferior facilities and unjustified high charges.

    He reiterated AirAsia’s complaints about the airport such as flight disruptions and cancellations due to major apron and runway defects, unscheduled closure of runways, ponding of water and fuel pipeline ruptures.

    “We were sued after we refused to collect the extra RM23 that MAHB has imposed for the sole benefit of its shareholders. We will vigorously fight this suit. We will not be part of this scheme to burden the travelling public by making them pay more for below par services,” he said.

    AirAsia noted that MAHB’s net profit more than tripled in 2017 to RM237 million from RM73 million in 2016, and estimates that MAHB’s returns on capital are well in excess of the level of the cost of capital set by regulators.

    AirAsia Malaysia CEO Riad Asmat urged regulators and policy makers to rebuff the “unfair and unreasonable” attempt by MAHB to use its monopoly to enrich itself further by revisiting and rescinding the decision to raise the PSC.

    “The overall tourism sector, one of Malaysia’s biggest revenue earners, and the interests of millions of Malaysians who have been able to fly because of the low fares pioneered by AirAsia, are being threatened by MAHB’s price hikes,” he said.

    He challenged MAHB’s argument of needing more profits to operate smaller loss-making airports on behalf of the government, noting MAHB’s “exponential” growth in profits over the last three years even after taking into account losses in its Turkish operations.

    “The additional RM23 to be collected will amount to more than RM100 million a year that will go straight to MAHB’s bottom line rather than to the government. MAHB will continue to be among the most profitable Malaysian companies for many years to come. But this will come at a cost to the wider Malaysian economy and at the expense of engines of growth such as AirAsia and AirAsia X,” he said.

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  • Vietnamese carriers get busy with early holiday plans

    Vietnamese carriers get busy with early holiday plans

    With six weeks to go for Tet, the Lunar New Year festival, Vietnamese carriers are bracing for the upsurge in demand. Jetstar Pacific, the low-cost arm of flag carrier Vietnam Airlines, announced Tuesday that it would increase the number seats on local routes by 80,000.

    It has also opened a new route from Hanoi to the southern city of Can Tho to meet travel demand between the two destinations before and after the Tet holiday, which falls February 2-10 next year.

    Earlier, the carrier had announced plans to operate 3,210 flights, or 600,000 seats, to serve customers for the Tet holiday.

    Vietnamese people traditionally move from the cities to their hometowns and villages all over the country to reunite with their families before the Lunar Near Year begins.

    State-owned Vietnam Airlines has also raised its number of seats from January 20 to February 19 to 1.4 million, 100,000 higher than the same period last year. This involves an addition of 566 more flights, to serve customers in Tet.

    The flag carrier has also announced that it will open a new route from Ho Chi Minh City to the new Van Don International Airport near Ha Long Bay in Quang Ninh Province. It will start operating one flight a day between the two destinations starting December 30.

    About 90 percent of flights between Ho Chi Minh City and Hanoi, central cities of Vinh and Da Nang have already been booked, a Vietnam Airlines representative said.

    As there are signs of the demand increasing further, the largest airline in the country by passengers carried plans to open another 56,000 seats in the next few days.

    Many VietJet Air agents have confirmed that VietJet has opened ticket sales from Ho Chi Minh City to Van Don Airport in Quang Ninh Province starting January 20. The Van Don International Airport, the first private airport in the country, is set to open for business on December 25, 2018.

    Dinh Viet Thang, head of the Civil Aviation Administration of Vietnam (CAAV), said at a conference last month that the number of airplanes will increase by 32 to 180 to meet the high travel demand around Tet time. This means that the transport capability of the Vietnamese aviation sector will increase by 20 percent, he added.

    The number of air passengers for the upcoming New Year’s Eve and Tet holidays is expected to increase by 11 percent year-on-year, according to the Civil Aviation Administration of Vietnam (CAAV).

    It also says that local airlines have registered to increase the number of flights by 2,611 to 19 airports for Tet. The number of passengers during the holiday is expected to increase by around 280,000 over normal days.

    The highest holiday surge in the number of passengers will be seen on the HCMC-Hanoi route, which will have 519 additional flights, or 20 percent of the total increase. The corresponding numbers for the HCMC-Da Nang route will be 354 flights and 14 percent; HCMC-Vinh, 306 flights and 12 percent; and Hanoi-Phu Quoc, 24 flights and one percent.

    Vietnamese carriers have served almost 45.1 million passengers in the country in the first 11 months of this year, up 11.9 percent from a year ago, according to the General Statistics Office.

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  • Flood of new passengers to stoke demand for jet fuel in Vietnam

    Flood of new passengers to stoke demand for jet fuel in Vietnam

    Vietnam’s jet fuel demand will surge to a record this year as its tourism booms and the country’s airlines are rapidly expanding. The country is on track to have 38 million international passengers and 16 million visitors this year, according to data from CAPA Centre for Aviation. That is up from 18 million passengers and 8 million visitors in 2015, according to the data.

    “Aviation demand in Vietnam is booming… Fuel consumption in Vietnam will reach a record high this year and will keep rising for the years to come,” said Tran Hoai Nam, vice president of Vietjet, Vietnam’s biggest private airline.

    He added Vietnam’s growth in foreign arrivals was the highest in Southeast Asia, rising 8.7 percent annually.

    The surge in traffic has translated into a rush of jet fuel demand in Vietnam. Through November, the country has imported 1.87 million tonnes of the fuel, according to customs data, equal to 14.8 million barrels, and up 18 percent from the same period last year.

    “For 2018, jet fuel demand in Vietnam is estimated to be increased by about 20 to 25 percent in comparison with 2017, mostly due to the increase in consumption of the international flights,” said a Hanoi-based trader at one of country’s jet fuel suppliers, who asked to remain unidentified due to company policy.

    Vietnam currently consumes about 18 million barrels of jet fuel per year, according to data from Petrolimex Aviation.

    By 2035, Vietnam will have 150 million airline passengers per year, nearly four times what it was in 2015, according to a 20-year forecast from the International Air Transport Association (IATA).

    Over the same period, India will have 442 million passengers, 3.6 times what it was in 2015, while China will have 1.3 billion passengers, 2.7 times what it was in 2015, IATA said.

    In November, Vietnam issued an aviation licence to Bamboo Airways, which would be the country’s fifth airline after Vietnam Airlines, Jetstar Pacific Airlines, Vietjet Aviation VJC.HM and Vietnam Air Services Co.

    Bamboo is expected to launch its first flights within weeks. It signed a provisional deal in July to buy 20 of the wide-body 787-9 jets from U.S. manufacturer Boeing and agreed a memorandum of understanding with Europe’s Airbus for up to 24 of the narrow-body A320neo jets in March.

    VietJet, which currently operates 60 Airbus jets, has signed a $6.5 billion (5.2 billion pounds) agreement to buy 50 new jets.

    Vietnam’s jet fuel imports will continue to surge as the country only has two refineries, Dung Quat in the central province of Quang Ngai and Nghi Son in Thanh Hoa Province, near to the capital Hanoi, which only started operations this year.

    “Both Dung Quat and Nghi Son refineries are primarily catered towards the production of gasoline and diesel, and thus, jet fuel yield is relatively low at 5 percent,” said Peter Lee, an analyst at Fitch Solutions Macro Research.

    Nghi Son, once fully operational, will produce about 4.6 million barrels of jet fuel per year, said a source at the refinery. Dung Quat can produce as much as 2.3 million barrels per year, according to the company website.

    “Vietnam will be reliant on imports to meet most of its jet fuel demand going forward,” Lee added.

    Vietnam imports most its jet fuel from refineries in Singapore, Thailand and China, trade data showed.

    Despite the steep growth outlook for Vietnam’s aviation sector, passenger growth might may be uneven as the country grapples with capacity constraints at its airports.

    Vietnam’s biggest airport Tan Son Nhat, serving Ho Chi Minh city in the south, receives about 10 million more passengers per year than it is designed to serve.

    The government is planning a second international airport at Long Thanh, 40 km (24 miles) east of Ho Chi Minh City, that will serve 25 million passengers a year starting in 2025.

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  • Bamboo Airways receives first aircraft, to take off earlier than planned

    Bamboo Airways receives first aircraft, to take off earlier than planned

    Vietnam’s newest airline, Bamboo Airways, has advanced its maiden flight by two days to December 27, its CEO said Sunday. Dang Tat Thanh said the private carrier’s first aircraft, an Airbus A319 leased from an Irish company, has arrived in Hanoi.

    Earlier, Trinh Van Quyet, chairman of FLC, the company that owns the airline, had said the first flight would be on December 29.

    Bamboo Airways received the aviation license to become Vietnam’s fifth airline early last month. But it is still awaiting an aircraft operator certificate and permissions for parking and selling tickets.

    It is also leasing an Airbus A320 from the same Irish company, and the airplane is expected to arrive later this month or early next month.

    Bamboo Airways is allowed to operate 10 aircraft on both domestic and international routes and to carry passengers and cargo on its flights.

    It plans to fly on 100 routes, connecting Vietnam’s major cities with popular domestic and international tourist destinations.

    The carrier was founded with a charter capital of VND700 billion ($30 million), which it increased recently to VND1.3 trillion ($55.68 million).

    It has signed deals to buy 24 Airbus A320neo and 20 Boeing B787-9 Dreamliner aircraft worth a total of $8.6 billion.

    The other four carriers in Vietnam are Vietnam Airlines, Vietjet Air, Jetstar Pacific and VASCO.

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  • Malaysia Airlines launches business suite

    Malaysia Airlines launches business suite

    Malaysia Airlines announced the rebranding of its First Class cabin to Business Suite offering passengers new levels of luxury with ample cabin space and privacy. “The new Business Suite was introduced in response to the growing demand of our guests. Our target is to enable the frequent flyer, looking for enhanced comfort, to now be able to enjoy a premium experience at competitive prices,” Malaysia Airlines group CEO Captain Izham Ismail said in a statement.

    “We are confident that our new Business Suite will change the way people travel in business class,” Izham added.

    Starting Dec 12, 2018, the Business Suite will be available on all of the airline’s A350-900 and A380-800s.

    The suite comes with a dedicated check-in counter, access to Malaysia Airlines premium First Class Lounge, 50kg baggage allowance as well as fine-dining experience onboard.

    The Business Suite cabin will be available on the London, Tokyo, Osaka route and on the Sydney and Seoul route during the winter season.

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  • AirAsia’s Vietnam venture set to fly in August

    AirAsia’s Vietnam venture set to fly in August

    A new Vietnam-based airline set up by Malaysian budget carrier AirAsia and a local company is expected to fly by next August. Tran Trong Kien, CEO of Hanoi-based resort ooperator Thien Minh Group, AirAsia’s partner, said that applications for aviation licenses would be made next February and likely obtained in six months.

    Vietnam will become the newest market for AirAsia, the largest low-cost carrier in Southeast Asia, which has affiliates in India, Indonesia, Malaysia, the Philippines, and Thailand.

    Kien said Prime Minister Nguyen Xuan Phuc had expressed support for the airline, which has yet to be named.

    The airline plans to deploy five or six Airbus SE A320 and A321 aircraft on domestic and regional routes, and expand the fleet to 30 within three years, he added.

    Last week Thien Minh Group signed a memorandum of understanding with AirAsia for setting up the new airline with a capital of VND1 trillion ($44 million).

    AirAsia will hold a 30 percent stake in it, and Thien Minh, 70 percent.

    The new airline would be a direct competitor to Vietnam’s budget carriers Vietjet Aviation and Jetstar Pacific, according to industry insiders.

    Vietnam Airlines is currently the biggest airline in terms of passengers carried.

    Bamboo Airways, owned by private corporation FLC, last month received a license and expects to make its maiden flight on December 29. It is allowed to operate 10 aircraft on domestic and international routes.

    There are five carriers in Vietnam: Vietnam Airlines, Vietjet Air, Bamboo Airways, Jetstar Pacific and VASCO. Vietnam Airlines owns VASCO and has a 70 percent stake in Jetstar Pacific.

    Vietnam received 14.12 million foreigners in the first 11 months of the year, up 21.3 per cent year-on-year, according to the General Statistics Office. Eighty percent of foreign tourists arrive by air.

    Vietnam’s aviation market has averaged 17.4 percentage growth in the past decade, far higher than the 7.9 percent rate for the Asia-Pacific, according to the International Air Transport Association.

    AirAsia almost struck a deal with Vietjet, but in 2010 the deal collapsed.

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  • Vietnam Airlines eyes stock market listing in 2019

    Vietnam Airlines eyes stock market listing in 2019

    Vietnam Airlines plans to list its shares on the Ho Chi Minh City Stock Exchange next year amidst rising competition of low-cost carriers. “Vietnam Airlines will go public in the first quarter of next year,” its chief executive, Duong Tri Thanh said. “We are making our target the first quarter of next year, and I think it is feasible.”

    But he admitted the final decision rests with the government.

    The carrier’s shares are traded on Hanoi’s Unlisted Public Company Market (UPCoM) and it has a market capitalization of more than $2 billion.

    The government currently owns around 86 percent of Vietnam Airlines, but has said it wants to reduce this to 51 percent by 2020.

    The country’s largest airline by passengers carried now faces rising competition from budget carrier VietJet Aviation and others. Last month Vietjet became the second most valuable airline in Southeast Asia by market cap behind only Singapore Airlines.

    With the domestic market showing signs of saturation, Vietnam Airlines seeks to expand overseas. In October it started a daily service from central Da Nang City to Osaka City to add to the 70 weekly flights from Vietnam to Japan. In 2020 it plans to begin a direct service to the U.S.

    Vietjet launched a daily service from Hanoi to Osaka last month to take its total number of international routes to 64 in 11 countries. It plans to add two more routes to Japan by next month.

    Other airlines are also jostling for market share. Bamboo Airways, Vietnam’s newest airline, received a license last month and is set to make its maiden flight on December 29.

    Experts said the listing of Vietnam Airlines would allow it to compete with other carriers by attracting more investors.

    “This would be a major Vietnamese company joining the stock exchange, which would interest international investors and potentially enable Vietnam Airlines to raise funds more easily to compete with the likes of VietJet and Bamboo,” the Financial Times quoted Tony Foster, a partner at Hanoi law firm Freshfields, as saying.

    Vietnam’s international aviation market, driven by the rapid growth in tourism, has been expanding at more than 30 percent a year, according to the CAPA Centre for Aviation, an Australian consultancy.

    Vietnam welcomed 14.1 million international tourists from January to November, up 21.3 percent year-on-year, according to the General Statistics Office. As many as 11.4 million of them came by plane, up 15.3 percent, it added.

    Vietnamese carriers transported 45.1 million passengers between January and November, up 11.9 percent year-on-year, and 369.2 million tons of goods, up 18.6 percent, according to the General Statistics Office.

    There are five carriers in Vietnam: Vietnam Airlines, Vietjet Air, Bamboo Airways, Jetstar Pacific and VASCO. Vietnam Airlines owns VASCO and has a 70 percent stake in Jetstar Pacific.

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  • Malaysia Airlines’s progress in line with recovery plan

    Malaysia Airlines’s progress in line with recovery plan

    Although relatively little is being said and publicised about Malaysia Airlines Bhd’s (MAB) recovery plan, a substantial amount of progress has actually been achieved in its business operations in line with the plan, which aims to revive the country’s national carrier and sustain its profitability.

    Group CEO Captain Izham Ismail said improvements in terms of cost base, productivity, information technology (IT) systems and customer experience were among the achievements chalked up by the company, thanks to the five-year Malaysia Airlines Recovery Plan.

    In an interview with Bernama, he said plans had been put in place to address the airline’s performance going forward and this had yielded improved performance for the first half of this year.

    The airline performed stronger in the first six months of this year than in the same period of 2017, adding that the key focus for the airline in financial year 2018 included driving revenue.

    “This will be underpinned by continuous improvement in customer experience, product quality and operational excellence while maintaining a productive and competitive cost base,” he said.

    According to Izham, MAB’s cost base has been significantly changed to bring it in line with its peer network airlines.

    As of today, the group has one of the lowest cost bases among its peer network airlines on a cost per available seat kilometre basis.

    The company has also seen material gains in productivity with a more competitively sized workforce, which is further complemented by a commitment towards continuous talent development.

    “A stronger local talent pool has now been established,” he said.

    On the group’s IT system, which is an integral part of overall airline operations, Izham said the complete overhaul had now been completed.

    He said the new Passenger Service System and migration to a cloud-based data centre had improved reliability and cyber security, as well as enhanced agility and better time-to-market.

    He said customer experience had also improved with market-driven metrics based on the company’s customer survey and net promoter measures showing significant positive gains over the last two financial years.

    On the operational front, Izham said the supply chain in engineering had been significantly tightened, which had helped the airline’s on-time performance, although it was still impacted by external factors beyond its control.

    “Since the set up of NewCo (MAB, which took over the operations, assets and liabilities of Malaysian Airline System Bhd or MAS) in 2015, we are showing progress and have recorded a double-digit compound annual growth rate growth (of 21%) over the last three years.

    “That is improvement straight to the bottomline,” he explained.

    MAB managed to record “steady year-on-year (y-o-y) performance” in the second quarter of 2018, with a marginal yield improvement, while revenue per available seat kilometre remained steady with a growth of 2% y-o-y.

    Going forward, Izham said MAB would continue to focus on the customer while making sure to deliver a strong schedule and great service for its customers.

    The airline also aimed to build a diverse Asia-Pacific network with a simplified fleet structure and operations to ensure consistency, and removing complexity in service delivery as well as pursuing a gradual and progressive growth strategy across markets, he said.

    Commenting on Khazanah Nasional Bhd’s plan to relist the national carrier as part of the recovery plan sometime from now until 2020, he said “the plan has always been to re-list Malaysia Airlines”.

    “We are working hard to stabilise the company and return it to profitability before any initial public offering plans can be considered,” he added. Khazanah owns 100% equity interest in MAB.

    In 2014, the sovereign wealth fund had injected investments amounting to RM6 billion to support the airline’s five-year turnaround plan with the aim of returning MAB to profitability by late 2017 and to relist the company by 2018 or 2019.

    Khazanah de-listed MAS from Bursa Malaysia on Dec 31, 2014.

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  • AirAsia X falls on the back of Q3 losses

    AirAsia X falls on the back of Q3 losses

    AirAsia’s share price slid in yesterday’s early morning trade as the airline recorded widening losses. At 9.45am, the counter was down 1.5 sen or 6.25% to 22.5 sen a share on turnover of 2.8 million shares. An increase in average fuel price and a RM138.2mil impairment made on an amount due from a joint venture resulting in AirAsia X’s net losses jumping almost five times to RM197.47mil from RM43.3mil in the year-ago quarter.

    The carrier said the average fuel price in 3Q18 had increased to US$91 per barrel compared with US$65 in 3Q17.

    Meanwhile, the impairment made in the third quarter was related to a lease rental and maintenance reserve due from a JV through a third-party leasing intermediary.

  • Indonesia AirAsia X to cease scheduled operations in January

    Indonesia AirAsia X to cease scheduled operations in January

    Indonesia AirAsia X< will cease scheduled operations in January 2019 and operate as a non-scheduled commercial airline thereafter. The carrier’s only scheduled operation – a seven-times weekly service between Denpasar and Tokyo Narita using an A330 – will be suspended in January, the AirAsia X Group disclosed in its third quarter results.

    “With the challenging operational environment in Indonesia, primarily due to the series of natural disasters that occurred in proximity to Bali, the company is underway to evaluate the available options for our Indonesian associate to ensure sustainability of the company with the last schedule flight from Bali to Narita will end in January 2019,” says AirAsia X group CEO Nadda Buranasiri.

    AirAsia X Indonesia will operate on a non-scheduled commercial airline basis.” IAAX posted a net loss of $1.53 million in the third quarter of the year, compared to a profit of $2.15 million a year ago. It attributed the poor performance to a 34% jump in costs, driven by the rise in fuel prices.

    During the period, it saw a 32% drop in the number of passengers carried, while load factor held steady at 80%. Average base fare climbed 21% to $146.The airline, which has struggled for some time now, also disclosed that it terminated its Jakarta-Tokyo Narita service in October. Last month, sister carrier Indonesia AirAsia said it will take over the routes and slots that IAAX had been using to operate a trio of Airbus A320s. IAAX was operating short-haul services to Denpasar, Jakarta and Surabaya.

    IAAX with two A330-300s. 2005-built PK-XRA is owned and managed by Aviator Capital, while PK-XRC, also built in 2005, is owned by KDAC 2017-1 ABS Portfolio and managed by Deucalion Aviation Funds.

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  • With China business back, Korean Air’s net triples in Q3

    With China business back, Korean Air’s net triples in Q3

    Korean Air’s net profit in the third quarter more than tripled in comparison to last year largely due to increased sales of long-haul flight tickets and a business recovery in China, the company said in an earnings report on Tuesday. The company posted 267.8 billion won ($236 million) in net profit for the quarter that ended in September, more than three times the 75.7 billion won it earned last year when the airline suffered from China’s economic retaliation for the deployment of a U.S. anti-missile system in Korea.

    The airline posted a record 3.4 trillion won in revenue for the quarter, up 9.1 percent year on year. For operating profit, the company posted 392.8 billion won, up 3.7 percent year on year.

    Despite a rise in international oil prices and a deterioration in foreign exchange rates, the company said joint venture operations with Delta Air Lines launched in May contributed to an increase in transfer passengers. General increase in demand for travel in Korea also pulled up sales.

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  • Bamboo Airways gets license, to start flying before year end

    Bamboo Airways gets license, to start flying before year end

    Vietnam’s newest airline, Bamboo Airways, has received its long-awaited aviation license and plans to launch its first flight within the next 45 days. The carrier, the country’s fifth, is allowed to operate 10 aircraft on both domestic and international routes and to carry passengers and cargo on its flights.

    It plans to fly on 100 routes, connecting Vietnam’s major cities with popular domestic and international tourist destinations.

    But initially it is likely to only operate on certain sectors like Hanoi-Quy Nhon and Ho Chi Minh City-Quy Nhon. Quy Nhon is a city on the central coast.

    According to Bamboo Airways general director Dang Tat Thang, most of the preparatory works have been completed for the maiden flight to take off before the end of the year.

    It needs to obtain an aircraft operator certificate and obtain permission for parking and selling tickets, which are expected to take 30-45 days from the date of license issuance.

    Bamboo Airways was founded by Vietnamese private firm FLC in mid-2017 with a charter capital of VND700 billion ($30 million), which it increased to VND1.3 trillion ($55.68 million) recently.

    The airline has signed deals to buy 24 Airbus A320neo and 20 Boeing B787-9 Dreamliner aircraft worth a total of about $8.6 billion.

  • Vietnam’s Vietjet valued second in Southeast Asia

    Vietnam’s Vietjet valued second in Southeast Asia

    Vietnam’s largest private airline, Vietjet Aviation, is the second most valuable airline in Southeast Asia by market capitalization. Vietjet’s value is only behind Singapore Airlines, as reported last Thursday. Last Friday, the airline was valued at $3.02 billion while Singapore Airlines topped the region at $8.29 billion.

    On Thursday, Vietjet Air launched a new international route between Hanoi and Japan’s Osaka. It plans to open two more routes to Japan in December and January.

    Earlier this month, Vietjet signed a $6.5 billion agreement to buy 50 Airbus A321neo jets.

    The airline said that the order was in line with its growth strategies and will enhance its operational efficiency and capacity, especially on international routes.

    In Vietnam, Vietjet only has to contend with two domestic rivals: the state-run Vietnam Airlines and its low-cost arm, Jetstar Pacific Airlines.

    “There are only three airlines in Vietnam, and that arrangement facilitates profit generation domestically,” a representative at an international brokerage told the Nikkei Asia Review.

    In March last year, Vietjet’s market capitalization surpassed that of state-owned Vietnam Airlines only a week after it was listed.

    Vietjet currently operates 60 Airbus jets with more than 385 flights daily within Vietnam and to countries and territories such as mainland China, Hong Kong, Japan, Malaysia, Myanmar, South Korea, Singapore, Taiwan and Thailand.