Analysis for Middle East
19-Jun-2013 12:20 PM
Royal Brunei Airlines (RBA) is eager to move on to the last phase of its new business plan as it becomes the first airline in Southeast Asia to operate 787s. An initial fleet of four 787s, which will be placed into service in 4Q2013 and 1Q2014, will significantly improve efficiency and should lead to a further reduction in losses of RBA’s long-haul network.
One of Southeast Asia’s smallest flag carriers has come a long way since restructuring in 2011, when three medium/long-haul and two short-haul routes were cut. So far the results have been positive with RBA’s short-haul operation having already turned the corner and is now growing again in response to surging demand for travel within Asia.
RBA is now looking at also renewing its narrowbody fleet, which would result in further cost savings. But the carrier still has an uphill battle in reaching profitability given its small size and the prospect of increased competition with LCCs.
16-Jun-2013 11:10 AM
Air New Zealand looks set to deliver on its objective to more than double earnings for FY2013, saying it is on track to achieve underlying earnings in at the “upper end” of the NZD235 million to NZD260 million (USD209 million) guidance provided in Apr-2013. If achieved, the result will nearly triple the FY2012 profit of NZD91 million (USD73 million) and build on the 300% improvement reported in the first half of the financial year.
Air NZ puts the improved performance down to a stable operating environment as well as changes to its long-haul network which has returned to profit for the first time since the global financial crisis. It is now focusing on forging deeper alliances to support its Pacific Rim network expansion plans.
In a surprise move, Air NZ also reinforced its hold on trans-Tasman alliance partner Virgin Australia by increasing its shareholding to just short of 23% and plans to creep to 26% in six months, thereby securing a strategic blocking stake over fellow shareholding partners Singapore Airlines and Etihad.
14-Jun-2013 2:00 PM
EgyptAir is pursuing rapid expansion in Africa as it looks to drive further increases in transit traffic, which has helped the carrier recover from the crisis of early 2011. The Star Alliance carrier expects to post a break-even result for the fiscal year ending 30-Jun-2013 (FY2013) and be back in the black in FY2014, featuring a vastly different and more balanced network than it had prior to the Jan-2011 revolution.
Over the last two years EgyptAir has more than doubled its international capacity within Africa, albeit from a modest base. The increased focus on Africa will continue in 2H2013 as four more destinations are added.
Africa and a bigger operation in the nearby Middle East has helped EgyptAir reduce its reliance on Europe in the aftermath of the crisis, which led to a significant drop in inbound tourist traffic. The larger regional network also has supported a significant increase in transit traffic, from only 3% prior to the crisis to about 17% currently. The increase in transit traffic along with more local traffic within the Middle East/Africa region, where demand has been rising rapidly, significantly improves EgyptAir’s outlook.
13-Jun-2013 8:02 PM
Wellington International Airport (WIAL) plans to extend its existing 2,000 metre runway by 300 metres so as to allow New Zealand’s capital city to attract direct long-haul services to Asia and North America using the Boeing 787 and Airbus A350.
The airport argues its geographic position at the centre of the country, and the nation’s domestic hub, means it is well placed as a third international gateway to Auckland and Christchurch. Based on its research the airport says sufficient numbers of passengers already fly to Auckland to connect with onward long-haul services to sustain a daily direct service to an Asian hub.
The exponential growth forecast from Asian markets combined with the lower operating costs and improved performance of new generation widebody aircraft are likely to make direct services to secondary destinations like Wellington a more viable proposition by the end of this decade, reducing the financial risk of extending the runway which could not have been contemplated a decade ago. Nonetheless, risk it is. But the rewards are (potentially) high.
12-Jun-2013 12:35 PM
Sharjah based Air Arabia, the Middle East's most successful and until recently overtaken by flydubai, the region's largest LCC, reported a net profit of AED59 million (USD16 million) for the three months to the end of Mar-2013.
The result continues a remarkable run of profitable results for the carrier, stretching all the way back to its first year of operations, even through the Arab Spring period - resulting in a near-doubling of its share price over the past year.
Expansion plans continue, with a new order in the offing, to be selected from the A320neo, 737 MAX and the Bombardier CSeries, according to CEO, Adel Ali.
5-Jun-2013 4:00 PM
Rapid growth in Turkish Airlines’ passenger numbers has been driven by international traffic, in particular international-to-international transfer traffic. By region, North America, Africa and the Far East have seen the highest growth rates, but Europe remains its biggest region by passenger numbers. This strategy has parallels with those of Emirates, Qatar Airways and Etihad. In part two of our analysis, we compare Turkish Airlines’ network with those of the latter three.
The geographic location of its Istanbul hub means that, compared with the three Gulf carriers, it is closer to Europe, North America, Latin America, North and West Africa (and western parts of Central Africa). Relative to Emirates, Qatar Airways and Etihad, it has a low percentage of its international seats on routes to Africa and, most strikingly, to Asia-Pacific.
In spite of operating narrowbody aircraft (more than 80% of its fleet) to a high proportion of international destinations, it has a lower average frequency per international destination than Emirates, particularly in Africa and Asia-Pacific.
4-Jun-2013 3:25 PM
Turkish Airlines’ mission statement includes the aims: “To become the preferred leading European air carrier with a global network of coverage,… whilst maintaining its identity as the flag carrier of the Republic of Turkey in the civil air transportation industry.” It also has a vision statement with a number of additional aims, including being an air carrier with “a continued growth over industry average” and “unit costs equating with low cost carriers”.
Turkish Airlines has the world’s second largest network by number of international destinations, but is only eighth by number of international seats and Turkey itself is only the number 15 aviation market globally. Its considerable success in meeting the aims noted above owes much to its strategy of attracting global transfer traffic flows via its Istanbul hub, an approach that both involves competing with, and invites comparison with, the three fast-growing Gulf carriers.
29-May-2013 5:21 PM
This is the last of a four-part series of extracts from the annual India Aviation Outlook Report for FY2013/14, to be published on 6-Jun-2013.
In this final extract we review the financial and operational performance of Indian carriers in FY2013 and look ahead at their prospects in this new financial year.
The first extract looked at the changing dynamics of the airline sector on both domestic and international routes, while the second examined the policy vacuum that persists in India and the impact this has on the viability and development of the sector. The third part addressed key issues in airport and airspace infrastructure.
To order the full 250+ page CAPA India Aviation Outlook Report FY14 click here or contact Binit Somaia on email@example.com