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Virgin Blue to press ahead with alliances; Tiger expecting continued passenger growth

15-Sep-2010

Virgin Blue was the strongest gainer among the LCCs yesterday, gaining 4% as CEO, John Borghetti, vowed to fight regulators’ decisions to deny proposed alliances with Delta Air Lines and Air New Zealand. He added that he is confident the recent preliminary rejections of its proposed alliances with Delta Air Lines and Air New Zealand would not mean the death of the alliances.

The carrier’s potential alliance with Etihad Airways has also faced opposition from Qantas. The CEO also stated the carrier is in a good financial and strategic position to expand its corporate market share, but still plans to maintain its position in the leisure market.

Tiger Airways pax up 18% in Aug-2010; expects continued strong pax growth

Also in the region, shares in Tiger Airways slipped 1.0%. Also yesterday, the carrier stated passenger increased 18% to 442,000 in the historically quiet month of Aug-2010, with an average load factor of 86%, for a 5 ppt year-on-year improvement. The carrier added that it expects “continued strong increases in passenger numbers” in the month.

AirAsia X to launch Kuala Lumpur-Tokyo Haneda service

AirAsia Group’s shares also declined yesterday, slipping 1.0%. The group’s long-haul subsidiary, AirAsia X, has announced plans to launch three times weekly Kuala Lumpur-Tokyo Haneda service on 09-Dec-2010, making it the first LCC to operate to the airport once it opens for international services in late Oct-2010.

The carrier is looking to increase service frequency to daily, after Malaysian authorities split up the seven daily rights to the airport. Malaysia Airlines was also awarded three times weekly frequency on the route, while Transmile received once weekly frequency.

Viva Macau officially declared bankrupt

Meanwhile, Viva Macau was officially declared bankrupt on 13-Sep-2010, following a creditors' meeting, where it was reportedly decided not to put forward any rescue plan for the company. The estimated amount of Viva Macau’s debts is still unclear, although media reports have suggested they may exceed USD125 million with a limited amount of assets. More than 160 creditors were represented at the creditors' meeting, accounting for more than 80% of the company’s debts. A total of 1,983 creditors have already been officially acknowledged, including ticket holders.

Selected LCCs daily share price movements (% change): 14-Sep-2010


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