Aviation Newsletter - November 05 to November 09, 2012
Union Minister of Civil Aviation Ajit Singh has asked the concerned authorities to take all necessary steps in advance to meet eventualities arising out of fog during the winter season particularly at the airports in North India.
Global air travel continued to expand in September: IATA
IATA has stated that Airline share prices increased for a second consecutive month in October, with the Bloomberg Worldwide Airlines Index gaining 4% on September. Moreover, airline shares outperformed the broader market, with the FTSE Global All-Cap staying flat over the month. Airline shares in all regions experienced a rise. Investors have seen improved performance in Q2 and Q3. The strongest performance was in Europe, where improved Q3 financial results helped generate a 7% increase in that region’s airline share values.
Early releases of Q3 financial results suggest a continuation of the relatively good financial performance in Q2. The small sample of airlines shows that both operating and net profits were up in Q3 compared to the same period last year. European airlines show significant improvement in net profits in the third quarter after experiencing losses in Q2. North American airlines continue to improve on a year ago, while Asia-Pacific and Latin American airlines post profits but are down on Q3 2011, IATA reported.
IATA also said that the surge in jet fuel prices after the June low has now stopped, with prices easing slightly throughout September and October. Jet fuel prices are also down but still remain high at close to $130/bbl. The cost of fuel has been within a range of +/-$15/bbl around $130/bbl for the past 20 months.
Global air travel continued to expand in September, but at a slower rate than during the first half of the year. There was an improvement in the level of air travel in September compared to August, but the weak business environment implies this is erratic rather than an upturn in the trend, IATA said.
IATA also said that Passenger capacity continues to rise, with a 0.3% increase in September versus August. On average during the past 3 years capacity growth has been kept below the expansion of traffic.
Kingfisher Airlines Q2 operating loss at Rs2.20bn
Kingfisher Airlines has been in a holding pattern, operating a limited schedule since March 2012.
Kingfisher Airlines reported an operating loss for Q2 2012 of Rs. 220 Crores.
After adjusting for finance cost of Rs. 401 Crores, a one-time cost of Rs. 448 Crores due to re-delivery of aircraft and restructuring / idle costs and taxes, the net loss was Rs. 754 Crores.
Kingfisher Airlines is preparing a comprehensive plan for re-start of operations which will be shared with the DGCA and bankers.
The airline is in discussion with various stakeholders to ensure that there are no future disruptions. Kingfisher Airlines expects to resume operations in the near future
In Focus Stories
IIFL Institutional Equities recommends 'Buy' on Jet Airways
IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, recommends “Buy” Jet Airways.
According to IIFL Institutional Equities report, Jet Airways’ (Jet) 2Q results confirmed our thesis of strong pricing discipline even in a weak demand environment. Heading into a seasonally strong 2HFY13 and possibly a cyclical upturn in FY14, Jet is well placed to generate significant improvement in profitability.
Jet’s management continues to focus on profitability over market share. It targets reducing debt by $600mn in FY13. We increase our FY14 EPS by 7% and our TP to Rs555. Retain BUY, the brokerage added.
The report was published by IIFL’s Institutional Equities Research desk.
Airlines must ensure that passengers are provided basic amenities: Ajit Singh
Union Minister of Civil Aviation Ajit Singh has asked the concerned authorities to take all necessary steps in advance to meet eventualities arising out of fog during the winter season particularly at the airports in North India. He has specially instructed that the passengers should not be put to unnecessary inconvenience and flight cancellations should be minimised without compromising safety.
He has said that the passengers should be provided timely information, food and beverages etc. in cases of flight delays. Singh has also advised Airports Authority of India (AAI) and other concerned authorities to make use of the best available technology for smooth navigation and landing of aircraft during fog.
Following instructions from the Minister, Director General of Civil Aviation today took a meeting of all stakeholders to review the fog preparedness at the Indira Gandhi International Airport, Delhi and other north Indian airports. It was attended by representatives of Airports Authority of India (AAI), scheduled domestic airlines, foreign carriers, DIAL, Indian Meteorological Department and CISF. The meeting considered the measures being taken with regard to airside, terminal-side and kerbside preparedness. Read more…
Jet Airways plans to repay $600 mn of debt: reports
Jet Airways has reportedly said that it would repay $600 mn of debt by the end of this financial year through the sale and of some of its aircraft.
Chief Financial Officer Ravishankar Gopalakrishnan said that they expect debt to come down to $1.96 bn by March, according to reports.
Reports also stated that the airline is seeking additional working capital to bridge the funding gap resulting from high operating costs and its inability to raise fresh equity.
India Ratings Assigns Air India’s Proposed Rs.74bn NCDs ‘IND AAA(SO)(EXP)’
India Ratings has assigned Air India Limited’s (AIL) proposed INR74bn non-convertible debenture (NCD) issue an expected rating of ‘IND AAA(SO)(EXP)'. The final rating is contingent on the receipt of final documents conforming to information already received.
The rating reflects the absolute, unconditional and irrevocable guarantee extended by the government of India (GoI) for the timely repayment of principal and interest on AIL’s NCDs. It is a continuing guarantee and shall remain in force and effect until the complete discharge of NCD obligations.
The guarantee will also remain in force if AIL could not meet its NCD obligations due to any dissolution/ winding up or similar proceedings initiated by or against the company or for any other reasons including any reference of the company to the Board for Industrial and Financial Reconstruction or AIL being brought under the purview of any other authority notified under any law. Read more…
Air India to Pay Up-to-Date salary to its employees before Diwali
On the direction from Union Minister of Civil Aviation Ajit Singh, Air India has decided to clear payment of salary to all its employees for the months of September and October 2012 before Diwali. It will also make up-to-date payment of PLI for all licensed category employees for the months of May and June 2012.
The Airline will incur an expenditure of Rs.230 crores for payment of salary and Rs.200 crores for payment of PLI. The balance PLI for non-licensed category employees for the months of May and June 2012 involving an expenditure of Rs.60 crores will be paid by the end of November 2012. PLI has been abolished w.e.f. 1st July 2012.
Ajit Singh while expressing concern over welfare of employees has asked Air India to make all efforts in future to make up-to-date payment of salary to the employees.
Jet Airways plans to ramp up capacity on Intl routes: reports
Jet Airways is planning to ramp up capacity on international routes through a mix of aircraft reconfiguration and deployment the Airbus A330-300 planes, according to reports.
Reports stated that the move will enable Jet Airways to take on competition on the London and US routes.
International operations constitute about 60% of Jet Airways’s revenue, says report.
Singapore Airlines & SilkAir announce special transit offers
Transiting in Singapore Changi Airport just got more exciting and rewarding with special transit offers jointly provided by Singapore Airlines, SilkAir and Changi Airport Group. These special offers include:
Changi Dollar Voucher (CDV)
Passengers travelling out of India on Singapore Airlines (SQ) or SilkAir (MI) and transiting to any SQ/MI destinations beyond Singapore can claim one Changi Dollar Voucher (CDV) worth S$20. The CDVs are valid for one-time use at all retail, food and service outlets located at the transit and public areas of Changi Airport Terminals 1, 2 and 3, excluding outlets in the Arrival Baggage Claim Halls. They can also be redeemed for one-time access to the Ambassador Transit Lounges in Terminals 2 and 3, for up to three hours. Lounge usage includes showers with basic toiletries, light refreshments, free flow of non-alcoholic beverages, local and international reading materials, as well as complimentary Wi-Fi. To claim the CDV, transiting passengers must produce their e-ticket and arrival boarding pass at any Information Counters in the transit areas of Terminals 2 and 3. CDVs are valid for tickets issued in India until 31 March 2014. Read more…
GCC region stood apart as a powerful base in global aviation: Qatar Airways CEO
Qatar Airways Chief Executive Officer Akbar Al Baker shared his insights on Qatar Airways and its unique position in global aviation during a keynote speech in Washington.
Addressing policymakers, students, intelligence officials and governmental leaders, the airline boss spoke of how the carrier was increasingly playing a pivotal role in the State of Qatar’s economic growth.
He also spoke of the importance of Qatar’s geographical position in the prosperous GCC region, comprising of neighbouring Kingdom of Saudi Arabia, Kuwait, Kingdom of Bahrain, Sultanate of Oman and United Arab Emirates. Read more…
Air Arabia record passenger traffic grows 22% in October
Air Arabia, the first and largest low-cost carrier (LCC) in the Middle East and North Africa, today announced that it has welcomed 458,316 passengers in October 2012, an increase of over 22% compared to the corresponding month in 2011.
The airline also reported that the average seat load factor - passengers as a percentage of total seats available – for the month stood at 80%, registering an increase of threeper cent over the figure for October 2011.
“Combined with Eid break, which is a busy period for air travel across the region, the month of October has seen Air Arabia adding set of new routes” said Adel Ali, Group Chief Executive Officer, Air Arabia. “As we continue expanding into new markets, more customers continue to take full advantage of Air Arabia’s affordable fares, demonstrating Air Arabia’s proven business model and product offering.”
Air Arabia recently added six new destinations to its ever growing network - Erbil in Iraq, Uffaand Rostov in Russia, Odessa in Ukraine, Pristina in Kosovo and Astana in Kazakhstan. The carrier also expanded operations from its Moroccan hub and launched new flights between Morocco and London, bringing Air Arabia’s global network to reach 81 destinations.
Emirates adds easyJet as Skywards' newest Airline Partner
In a unique partnership to facilitate travel around Europe, Skywards, Emirates award-winning frequent flyer programme, and easyJet, Europe’s fourth largest airline, announce the launch of a redemption agreement of Skywards Miles for flights on easyJet; connecting Emirates 31 destination strong European network with all of easyJet destinations.
As of 06 November, members will be able be use their Skywards Miles to fly with easyJet to over 30 countries across Europe and North Africa. Used in conjunction with an Emirates flight or for separate travel itineraries, Skywards members will have the choice to expand their travel options across Europe. The functionality will be available to Skywards members in every tier and the flights are bookable online.
“With over 130 destinations within Europe and North Africa partnering with easyJet was an obvious choice for Emirates. Like Emirates, easyJet is committed to expanding its operation by connecting an increasing number of cities; offering passengers limitless travel opportunities. Read more…
Qatar Airways launches flights to Mozambique
Qatar Airways launched scheduled flights to Mozambique, its latest foray on the African continent and 10thnew route of the year.
The Doha-based carrier inaugurated the first of three weekly services to the country’s capital city of Maputo, gateway to Mozambique’s rich natural resources and a source for strong business.
The launch is further testament to Qatar Airways’ strategy to operate to underserved markets that have huge potential for scheduled international flights. Qatar Airways is the first and only airline from the Middle East flying to Mozambique, which becomes its 19thgateway across the African continent.
Flight QR584 arrived in Maputo this morning to a water salute and a welcome by traditional dancers followed by an airport ceremony attended by more than 80 local dignitaries and media. Read more…
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