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Asia Pacific Airlines Body Advised to Include Major Chinese Airlines so as to Strengthen its Global Clout; Seeks Reduced Government Interference

Lara — Wed, 02 Dec 2009 08:05:23 +0000

The Association of Asia Pacific Airlines (AAPA) has been urged to woo major airlines in China to strengthen the clout of the association on the global stage. Singapore Airlines CEO, Chew Choon Seng, affirms this need as the association acknowledges China’s present status and ability at taking a leading position on the world stage.

The CEO further notes that the region’s share of international traffic was of similarly significant proportions given that countries of the Asia Pacific at present account for more than half the world’s trade, and is the fastest growing region to boot. This advice comes as the AAPA has called on governments in Asia Pacific to support the development of a regional framework that will address the air traffic management infrastructure needed to support future regional industry growth in an efficient and cost effective manner, including the adoption of inter-operable globally harmonized technologies. On their part, the AAPA seeks to be more representative and reflective of the region’s strength and rising stature, and have more influence in international aviation matters, especially with membership from principal airlines in China.

To further boost recovery of the airline sector in the region, the AAPA has also called on regional governments to reduce restrictive policies against airlines as government inefficiency remained a clear obstacle to recovery. The Director of AAPA, Andrew Herdman, in this regard notes that in order for the industry to achieve long term sustainability and growth, it was time for governments to accommodate the idea of removing policies that have inhibited development for decades, noting the issue of government taxes and charges which account for around 15% of the average ticket price, even though the industry pays separately and in full for its own infrastructure.

Source: TravelMole at www.travelmole.com

Singapore Airline Voted the Best; Overcomes Gloomy Sentiments over Operating Costs Recorded in July

Lara — Wed, 02 Dec 2009 07:09:53 +0000

Singapore Airlines has been named Airline of the Year in the 2009 OAG Airline Industry Awards. The carrier also won in several categories including Best International First Class, Best Transpacific and Best Europe to Asia/Australasia airline.

Australia’s Qantas won the award for the Best Airline Based in Australia/Pacific while UAE’s Emirates won the Best Airline Based in the Middle East/Indian Sub-Continent. Known as the “Oscars of the Airline Industry,” 2009 marks the 27th anniversary of the awards, which are voted for by frequent flyers around the globe. Singapore Airlines’ accolade comes as heaven sent given that in July this year the carrier recorded its first quarterly loss since the SARS crisis in 2003, blaming it on a combination of the global economic downturn, the outbreak of Influenza A (H1N1) and fuel hedging. The group recorded a loss of SGD 307 million (USD222 million) for the quarter that ended in June 2009 while its operating loss was SGD 271 million (USD 196 million), against a profit of SGD 265 million (USD 192 million) previously.

The company, in effect, took several steps to contain rising costs, including a freeze on hiring, unpaid leave, wage cuts and deferment of non-essential projects. The measure to trim staff costs alone will provide an estimated savings of SGD 60 million (USD 43 million) for the current financial year. The group recorded an operating loss of SGD 319 million (USD 231 million) for the first quarter, against an operating profit of SGD 343 million (USD 248 million) last year.

Source: TravelMole at www.travelmole.com

Airline Costs Rise as Passenger Demand Stagnate

Lara — Fri, 06 Nov 2009 03:56:15 +0000

The latest air traffic results from the International Air Transport Association (IATA) for end October show flat passenger demand year on year, while airline costs have equally risen. This result comes against a backdrop of carriers cutting capacity to match demand but where this has lead to aircrafts flying fewer hours, leading to a rise in non-fuel costs.

The low passenger demand is further catapulted by rise in fuel prices given that this rose to USD 75 per barrel in September, compared to USD 43 at the beginning of 2009. According to IATA’s Director General and CEO, Giovanni Bisignani, the worst may be over in terms of the fall in demand, but yields continue to be a disaster as costs are rising, making the industry linger in losses within a fragile business environment. The CEO further adds that the hike in Air Passenger Duty (APD) in the UK was the wrong response to the aviation industry’s trauma, in that making travel more expensive will not be a means towards stimulating the economy. Despite the gloom results posted for the month of October, the aviation industry has seen some improvement, with international scheduled passenger demand now 5% better than its lowest point in March this year, though this remains too early to predict any concrete sign for recovery.

Demand is still 6% below the peak recorded in early 2008. European carriers continued to see a drop, with demand falling from -1.6% in August to -4.2% in September. North American carriers, on the other hand, recorded a flattening out of passenger demand with figures showing a 2.4% drop in September compared to a 2.5% reduction in August. Some markets reported better results, with Asia Pacific seeing the most significant improvement. The region’s carriers bucked the global trend and recorded a 2.1% rise in passenger demand last month, compared to a drop of 1.6% in August. IATA places the positive results posted for the Asia Pacific region to three factors, notably government stimulus packages that are driving increases in production, the region’s banks remaining relatively strong and consumers not as burdened by debt as those in the US and Europe.

Latin American carriers also fared well, experiencing a jump in demand from -2.3% in August to 3.4% in September, while African carriers also saw some improvement in passenger demand, from -4.9% in August to -4.2% in September.

Source: Air & Business Travel News at www.abtn.co.uk

Asia Pacific Airliners up their Scale for September; Sector Still Fragile

Lara — Wed, 28 Oct 2009 06:29:12 +0000

Preliminary figures released by the Association of Asia Pacific Airlines (AAPA) show that member airlines carried a total of 10.8 million international passengers in September 2009, effectively matching the numbers carried in the same month last year for the first time in over twelve months. International passenger traffic, measured in revenue passenger kilometers (RPK), was 0.9% lower in September, but this marked a significant improvement compared to the steep monthly declines recorded over the past year.

These traffic results were achieved despite a 6.1% reduction in seating capacity, pushing the average international passenger load factor 4.1% points higher, to 76.4% for the month. AAPA international air cargo traffic also continued its slow recovery. Although September traffic, measured in freight ton kilometers (FTK), was still 6.5% below the levels of a year ago, this is the smallest shortfall recorded so far this year. The average AAPA international cargo load factor in September rose by 3.4% points to 68.7% for the month, as carriers cut their capacities by 11.2%. Commenting on the results, AAPA Director General, Mr. Andrew Herdman, noted that the September traffic figures offer some encouragement amidst signs of a continuing pickup in consumer confidence and economic activity, being led by the Asia Pacific region. Despite these encouraging figures, the airline industry is still facing significant challenges.

For the first nine months of the year, the overall international passenger numbers were 9% down compared to last year, whilst international air cargo traffic registered an 18% decline over the same period. Shrinking traffic volumes, coupled with lower yields, have led to sharply lower revenues and heavy losses for most carriers. Despite a number of carriers cutting back on their capacity, amid other cost reduction efforts, airline companies are still struggling to restore profitability. Meanwhile, rising oil prices are currently driving up costs, and will act as a brake on the wider economy, making recovery a fragile endeavor.

Source: Asia Travel Tips at www.asiatraveltips.com

Garuda to Restore its European Services via Dubai Starting July Next Year

Lara — Fri, 23 Oct 2009 05:35:28 +0000

Garuda Indonesia has announced plans to restore its European services from June 1 next year. In this schedule plan, the Jakarta-Amsterdam service will be first up, with the service operating via Dubai.

Indeed the restoration of flights to Europe comes at a time when Garuda is busy reinventing itself as a major carrier in Asia. An overhaul of the airline staff’s business and service mentality, together with financial and operational restructuring, has seen the airline return to profit and pay down debt under CEO Emirsyah Satar, who joined Garuda as finance chief in 1998. In effect, the CEU exudes confidence in preparing the company for an IPO next year. Garuda only recently received approval from the European Union to resume services to the region. It had been among several Indonesian airlines banned from flying to Europe because of safety concerns which much focus on Indonesia’s aviation watchdog over its failure to oversee airline safety standards in line with EU requirements.

The Jakarta-Amsterdam route will be served by A330-200 with a seat capacity of 222, including 36 seats in Business Class. The carrier has on equally breadth announced plans to resume flights to the UK by summer 2011 coming after announcing plans to re-open an Amsterdam-Jakarta service. The airline is believed to be drawing up plans to deploy a new Boeing 777 to serve to one of London’s airports by early summer 2011.

Source: TravelMole.com at www.travelmole.com

Premium Traffic Still on the Fall Warns IATA

Lara — Mon, 19 Oct 2009 05:30:51 +0000

The International Air Transport Association (IATA) warns that a 12% drop in premium traffic was recorded in August compared to the same month last year, although this estimate was better than the 23.5% drop in May.

This significant rise comes at a time when trends in world trade picked up since June but not sufficient enough to warrant a significant rise in premium travel. IATA reports that higher load factors were raising the average cost of fares in both economy and business class. IATA notes that the number of passenger flown on international markets in August was 1.5% down on the figure for the same period last year. Passengers in economy class dropped by 0.4% this in August’s year compared with last the same period last year. IATA’s traffic monitor reports that short haul premium travel in Europe was 20% in August compared with last year, despite a “structural decline” as passengers witched to economy class.

Premium travel on North Atlantic routes, on the other hand, had “improved” as the US and European economies improved. This was however still 8% down compared to last year’s estimate. IATA warns that headwinds from consumer debt and excess business capacity will continue to prevent a strong economic recovery, and therefore travel to Europe and North Atlantic regions. Premium traffic also fell in Asia-Pacific despite being the region where economic activity had improved. There was a 10.4% fall in premium travelers in the region in August compared with that last year though this was better than the 19.4% slump recorded in July.

Source: Air & Business Travel News at www.abtn.co.uk

Signs Indicate Overall Improvement in Air Traffic: IATA

Lara — Tue, 06 Oct 2009 09:33:43 +0000

Figures released on scheduled traffic for the month of August by the International Air Transport Association (IATA) notes that passenger demand was down 1.1%, which was an improvement compared to the 2.9% decline in July, while freight demand fell by 9.6%, also an improvement when compared to the 11.3% drop in July.

Passenger load factors have also improved by 1.2% points to 80.9%. Despite the tighter supply and demand conditions average fares continue to be depressed (-22% for premium seats and -18% for economy). To match capacity with demand, airlines have generally reduced daily aircraft utilization in recent months. Boeing 777 fleets have for instance on their part dropped their average daily hours by 2.7% to 11.1 hours per day through the first eight months of the year. Lower utilization is noted to help load factors, but where spreading fixed asset costs over fewer hours in the air ends up pushing unit costs. IATA’s Director General and CEO, Giovanni Bisignani, notes that despite demand continuing to show improvement given the set back in the industry, profitability however remains distant. Air fares have indeed stabilized, but at profitless levels, while cost pressures are mounting from reduced aircraft utilization and rising oil prices. These factors still plagues the industry.

Compared to the low point of March 2009, seasonally adjusted international passenger demand has improved by 6%, but where traffic levels remain 5% below May 2008 estimates when the fall in demand began. IATA notes that all regions, except the Middle East, saw improved demand conditions in August compared to July. On their part, Asia-Pacific carriers recorded the most significant improvement moving from a -7.6% drop in July to -1.6% in August. IATA reports that this improvement is somewhat exaggerated as August 2008 was the start of the steep decline in passenger demand for the region’s airlines. This region is where second and third quarter growth has been strongest, boosted by massive government and central bank stimulus packages and fewer problems with consumer debt and bank balance sheets.

In terms of fright demand, carriers in the region, which represents 44% of the global freight market, saw year-on-year demand improve marginally from -9.5% to -9.0% in August compared to July. IATA’s CEO cautiously warns that even with improving demand, there are few bright spots in the industry and that change is needed starting with the industry’s antiquated rules of the game which restrict access to markets and to international capital. Mr. Bisignani advices that liberalization of ownership rules could be a lifeline for airlines as the industry approaches a difficult fourth quarter.

Source: International Air Transport Association at www.iata.org

Singapore Airlines and Shangri-La Hotels and Resorts Garner Top Awards at World Event

Lara — Mon, 05 Oct 2009 09:06:22 +0000

This year’s Business Traveler Awards 2009 saw Singapore Airlines impressing by garnering five awards for Best Long-Haul Airline, Best Business Class, Best Economy Class, Best Cabin Staff, and Best Asian Airline. Virgin Atlantic won best Premium Economy Class, easyJet took Best Low-Cost Airline, and Emirates was a surprise winner of Best First Class for the first time.

British Airways reclaimed the overall title of Best Airline from Singapore Airlines, an accolade it had held from 1994 to 2007. BA also won Best Short-Haul Carrier and Best Frequent Flyer Program. The event is regarded and recognized as the market’s benchmark for excellence. In the hotel industry, an unexpected winner was Four Seasons Hotels and Resorts which stole the crown for Best Business Hotel Chain Worldwide from the Sheraton group, which has held the title every year since 1994. The Hilton group swept the awards for Best Business Hotel Chain in the UK and Europe, with Marriott winning Best Business Hotel Chain in North America for the fourth consecutive year, Jumeirah in the Middle East for the fifth consecutive year, and Shangri-La Hotels and Resorts continuing its dominance in Asia-Pacific for an impressive 15 uninterrupted years.

The Best Airport in the World was once again awarded to Singapore’s Changi Airport, which has yet to be unsaddled from this seat, Amsterdam’s Schiphol Airport won Best Airport in Europe, and London Heathrow was awarded Best Airport for Duty-Free Shopping, for the first time since 2001. In another closely contested category, Hertz snatched the Best Car Rental Company Worldwide crown from Avis this year. Commenting on the awards Business Traveler’s editorial director, Tom Otley, noted that the year is proving a challenge for the industry with the recession forcing many companies to review travel costs but where recent surveys show that despite the dramatic downturn in the economy, only 7.5% of companies have instigated a ban on business travel. This year’s ceremony was co-sponsored by the Global Hotel Alliance and American Express, and took place at the London Hilton on Park Lane hotel.

Awards were presented by British adventurer, Sir Ranulph Fiennes, who conquered Mount Everest earlier this year at the age of 65. This year also saw the launch of the Business Travel Awards 2010, building on 14 years of success with the Business Travel World Awards, and combining the popular Buying Business Travel Diamond Awards. For the past 14 years, The Business Travel World Awards has been a major event on the business travel industry’s calendar. For the event’s 15th year the publishers of Buying Business Travel presented the industry with an enhanced celebration of excellence under the new name of The Business Travel Awards. The event was a combination both of the long-standing Business Travel World Awards and the prestigious Buying Business Travel Diamond Awards, which have been recognizing industry success for the past 5 years in glittering style.

Source: Business Traveller at www.businesstraveller.com

Global Airline Capacity Shows Positive Growth for the Second Consecutive Month; Asian Airlines Lead the Pack

Lara — Mon, 05 Oct 2009 01:42:25 +0000

With the global airline capacity stabilizing in August, analyst can now confirm that capacity growth is once again possible in September showing a slight lift of 1.4% or 4,130,744 seats, compared to September 2008.

Even as July this year marked a full year of capacity cuts and last month saw stability with a marginal 0.2% lift, the Official Airline Guide’s (OAG) September 2009 figures reveal that airlines are looking to grow networks once again. Frequencies for September 2009 are, however, showing a slight decrease compared to the same period of last year, with a total of 2.4m flights scheduled, down 0.6%, or 14,321 flights, compared to September 2008. Last month, the year on year global frequency figure was down by 2% and capacity was up by 0.2%. The world’s airlines have scheduled 296.9 million seats, a rise of 1.4% (4,130,744 more seats) over September 2008 levels. These figures are revealed in the September 2009 edition of OAG FACTS (Frequency & Capacity Trend Statistics), a monthly market intelligence tool providing the latest data on current passenger airline activity around the world.

OAG Market Intelligence Vice President, David Beckerman, notes that the steady upward trend since May this year has been continuing especially after 11 months of capacity cutbacks, where the latest figures indicate a growing confidence within the industry that demand for air travel is starting to pick up. Regionally, both Europe and North America are still seeing drops in both seats and frequencies, but where these drops have begun to stabilize. Asia on the other hand, is seeing services within the region pick up at an extraordinary pace, with 8% lift in services and 10% lift in seats, while services between other continents are still dipping slightly. Despite this capacity growth, the International Air Transport Association (IATA) is predicting that this year, airline losses will amount to USD 11 billion, downgrading its original forecast by another USD 2 billion.

Source: YAHOO FINANCE at www.finance.yahoo.com

Asian Airlines Offered Options on Strengthening their Market Position and Leverage Opportunities

Lara — Mon, 05 Oct 2009 01:09:20 +0000

Airlines in the Asia Pacific region can adopt strategies around ancillary services and onboard sales to strengthen their position and leverage opportunities as the Asian economy starts to turn around. According to John Devins, regional director for Asia Pacific at GuestLogix, airlines in the region need to choose whether to perform short-sighted triage on current expenses, or to take a cue from US airlines and consider onboard retail solutions that translate to improved long term business performance.

GuestLogix believes what is important is that airlines in the region need to choose whether to perform short-sighted triage on current expenses, or to take a cue from US airlines and consider onboard retail solutions that translate to improved long term business performance. GuestLogix estimates that given the right strategy, revenues could increase from USD 3.8 billion in 2008 to nearly USD 17 billion by 2011 from global onboard duty free sales and estimated food and beverage sales based on an approximate conversion rate of 1% of passengers. This is a huge figure by any airline’s standards. Airlines in the region will therefore need to address onboard sales in order to get the most out of their ancillary revenue strategies. Devin notes that many airlines in the region focus largely on the sale of duty-free or Food & Beverage (F&B) items onboard.

But onboard sales can comprise many more innovative products not limited to the in-flight experience. Devin provides some examples of strategies such as selling tickets to Disneyland onboard a Hong Kong-bound flight, or a train ticket to the middle of the city. This would not only open up a whole new sales channel to airlines and attractions, but also improve the customer’s travel experience. GuestLogix estimates that the top 20 airlines in Asia, measured by passenger trips, could generate over USD 115 million in annual incremental profits from onboard transport ticket sales on the basis of just 10% of their passengers buying tickets onboard. In addition, catalogue shopping and entertainment ticket sales could generate USD 172 million in annual incremental profits for these airlines if only one sale was made per flight.

The need to strengthen their position and leverage opportunities in the region by airlines has become more urgent as the industry currently faces growing losses as a result of external factors including rising oil prices and weaker yields. The International Air Transport Association (IATA) recently released a revised global financial forecast that predicts global airline losses totaling USD 11 billion in 2009, with Asia-Pacific carriers expected to post losses of up to USD 3.6 billion. Industry revenues for the year are also expected to fall by 15% year on year. However, the future is not all bleak. Asian carriers are predicted to be the first to benefit from the reviving economic growth in the region and at the same time, these airlines can refine their retail strategy to earn more from the existing pool of travelers.

Source: TravelDailyNews.com at www.traveldailynews.com