China Southern Airlines reportedly reported loss from the carrier’s A380 operation in 2012 between CNY150 million (USD23.4 million) and CNY200 million (USD31.3 million), according to The Economic Observer. The carrier is scheduled to take delivery of its fifth and final A380 at the end of Feb-2013.
China Southern Airlines A380 loss reached up to USD31m in 2012: report
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Yield pressure for China Southern Airlines as it deploys A380 to Sydney
While China Southern's announcement to serve Sydney from Oct-2013 with the A380 may be good for Australia at large, for China Southern there are limited upsides besides strategic ambition and slowly ending its negative perception from not being able to use the A380 in international markets.
The carrier will replace one A330 Sydney service with the A380, generating a 41% increase in capacity, which will likely make the service loss-making for some time. Sharper increases will occur in the premium cabins, where daily business class seats will rise from 48 to 100 and first class from four to eight.
The increase in capacity will occur in an already over-saturated Australia/NZ-Asia market, which is seeing increased capacity from AirAsia X, Air New Zealand, Emirates, Qantas, Scoot and Singapore Airlines.
Turkish Airlines 1Q revenues grow 28% as losses narrow, but unit costs will be key to FY result
Turkish Airlines cut its 1Q2013 operating loss from TRY173 million to TRY23 million (EUR9.7 million), almost breakeven in the traditionally weakest quarter. Revenues grew 28% on capacity up 21%, with particularly strong growth to Africa, Middle East and Europe. The improved result was driven by unit revenue growth (RASK) as unit costs (CASK) were held flat in spite of higher fuel prices. Earlier this year, the carrier said it did not expect a unit revenue increase for FY2013, so this represents a good start to the year, and ex fuel unit costs will need to remain under control over the rest of the year.
Much of Turkish Airlines’ success has been built on an efficient workforce and the geographic location of the Istanbul hub, which facilitates a global connecting strategy. Both of these elements were visible in 1Q2013, with labour cost growth slower than capacity and transfer passenger growth outpacing the total. Nevertheless, a strike called on 15-May-2013 (albeit with limited impact) and the relentless competitive presence of the Gulf carriers are reminders that this success cannot be taken for granted.