Thai Airways stated the Export Credit Agency (ECA) is currently in the process of approving a guarantee facility for USD222 million in loans for the carrier’s Airbus aircraft purchases, after the Thai Government refused to guarantee loans (Bangkok Post, 14-Jan-2010). President, Piyasvasti Amranand, stated the government’s refusal would not affect its purchase of two A330-300s, as the ECA has already agreed to provide support for four other aircraft procurements.
Export Credit Agency currently in the process of approving loan guarantees for Thai Airways
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Southeast Asia-US airline market Part 2: at least 7 airlines to offer US nonstop services by 2021
The deployment of new generation ultra-long-range widebody aircraft is prompting several airlines to plan new nonstop services between Southeast Asia and the continental US. New variants of the A350 have particularly emerged as a new, more efficient and popular option for Southeast Asia-US flights, with orders over the past year from three Southeast Asian flag carriers.
On 5-Sep-2016 Vietnam Airlines became the latest Southeast Asian airline to commit to new generation ultra-long-range aircraft capable of new nonstop routes – joining Philippine Airlines and Singapore Airlines. Garuda Indonesia and Thai Airways are likely to follow, resulting in four Southeast Asian airlines operating nonstop flights to the US by early next decade, compared with only one currently.
Delta Air Lines may also join United Airlines with nonstop Southeast Asia-US services. There are opportunities in the Southeast Asia-US market for nonstop routes, but competition with one-stop products will be intense. Profitability will be heavily challenged or non-existent. SIA started the trend due to strategic, not financial, imperatives. Under the charm of low fuel prices, Southeast Asian airlines risk falling into the spell of "me too" nonstop flights, just as they did with over-sized aircraft acquisitions.
Hawaiian Airlines: cost creep casts a slight shadow over a favourable PRASM performance
Hawaiian Airlines’ geography has been a boon for the airline throughout 2016 as the company’s unit revenue performance has outpaced that of its peers. Hawaiian has benefitted from immunity to the lack of pricing traction in many domestic markets on the US mainland, and rational capacity deployment on is largest North American routes.
The company expects to continue posting a unit revenue outperformance for the remainder of 2016, driven by still favourable capacity trends in its markets. Hawaiian’s own capacity growth is expected to fall between 3% and 4% for 2016, and remain in the low- to mid- single-digit range for the foreseeable future.
Although Hawaiian continues to outperform the industry in unit revenue, the company is facing inflated unit costs in 2016 driven by several factors, including increased compensation and technology investments. The airline is also in the middle of pilot negotiations, and has acknowledged additional cost headwinds once a new collective bargaining agreement is reached.