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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China Southern Airlines to move long-haul focus from growth to sustainability and partnerships
Asia’s largest airline, China Southern Airlines, is entering the home stretch of an ambitious strategy to boost its international network and shift reliance away from its domestic market. The largest of China’s major carriers, China Southern sees its 2014 launch to Frankfurt and New York as capping off a network that has grown rapidly in Australia, as well as adding London.
International RPKs comprised 20% of China Southern’s network in 2013 for the first time, up from 14% in 2010. International revenue has lagged, comprising 17% of 2013’s passenger revenue, up from 13% in 2010. This is not entirely a success story. Its A380s do not have enough markets to reach. Sustainability lags, and China Southern’s growth has often created over-capacity.
This is recognised by Chairman Si Xianmin, who has pledged to bed down markets and add more partnerships, including outside of its SkyTeam alliance, following a deal with Qantas. But China Southern’s eyes are still very much on long term success and not immediate results. As Mr Si said, “If you want to look into the future, look to the long-term.”
easyJet: more aircraft come in as more cash to shareholders goes out. Stelios' baby is in good hands
After exercising its last 27 purchase rights over current generation A320s, easyJet's fleet now looks set to grow from 226 aircraft currently to 304 in FY2019. Although it will remain Europe's number two LCC fleet after Ryanair, it will be able to match the latter's growth rate before its A320 neo deliveries come on stream.
This increased fleet plan reflects easyJet management's confidence in its ability to continue to generate a value-creating return on capital, which was sector-leading in FY2013 and looks set to rise once more in FY2014. Total shareholder returns, which include both capital gains and dividends, have also led the industry. easyJet now proposes to increase its ordinary dividend payout ratio from one third to 40% of net profit.
The company's biggest shareholder, Sir Stelios Haji-Ioannou, a vocal supporter of higher dividends, has been critical of its fleet expansion. At easyJet's recent Investor Day, the airline's management team gave some strong reasons for all shareholders to trust its track record.