Precision Air Services reportedly plans to sell part of its shares in an IPO in Oct-2011, to raise KES2.7 billion (USD28.7 million) to support its fleet expansion programme (Nation/Business Daily Africa, 02-Sep-2011). The carrier, which is partly owned by Kenya Airways, will list on the Dar es Salaam Stock Exchange. The IPO will see both Kenya Airways and Tanzanian businessman Michael Shirima dilute their shares from 49% and 51%, to 34.2% and 34.6% respectively. A total of 55 million new shares will be issued. Further details of the IPO will be released following approval from regulatory authorities. “We now have the green-light from our stock exchange and, with the final approval from Capital Markets Authority expected in two weeks, we should be able to go public by Oct-2011,” stated MD and CEO, Alfonse Kioko. Precision Air Services plans to increase fleet to 17 by the end of 2013 from the current 11.
Precision Air Services plans to file IPO in Oct-2011
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LCC Volotea Part 2: in a competitive space positioned between regional airlines and LCCs
Part 1 of CAPA's analysis of Spanish LCC Volotea highlighted its rapid growth, but noted that its load factor left room for improvement. The Spanish LCC flies almost two thirds of its seats in domestic Italy and France, but operates in a total of 12 countries and 66 airports across Europe. It concentrates on small and medium-sized airports, with Italy and France dominating its list of leading routes.
This second part of CAPA's report on Volotea looks at its generally favourable competitive position on its leading routes (it is the biggest airline on 15 of its top 20 routes). This positive competitive standing has been carried onto the majority of the 32 routes that Volotea has launched in the past year, although its low frequencies and very strong summer bias limit its appeal to business passengers and give it a leisure focus.
Volotea's average trip length sits between those of regional airlines and Europe's principal LCCs. This is evidenced by the fact that two of its most frequent competitors are Hop (Air France's regional airline) and Ryanair (Europe's leading LCC). Volotea's fleet strategy is now to replace its 125-seat Boeing 717s with 150-seat A319s. This will result in it butting up against LCCs more often.
Volotea Part 1: Spanish LCC, growing at ~40% pa - focussed on domestic Italy & France
Volotea is an unusual creature. It's a Spanish airline, but has almost two thirds of its seat capacity in domestic Italy and domestic France. It's an LCC, but mainly operates 125-seat Boeing 717 aircraft – much smaller than the 737-800 and A320 aircraft more typically flown by European LCCs. Nevertheless, more than four years after its 2012 launch, it is one of the fastest-growing airlines in Europe, with passenger growth of 39% in 2015 and a similar rate expected in 2016.
This first part of a two-part series on Volotea looks at the airline's growth record and load factor development. It analyses the geographic distribution of Volotea's capacity across Europe and examines its network of small and medium-sized airports. It also presents the airline's leading routes, which are dominated by Italy and France.
Part 2 of CAPA's analysis of Volotea will consider the airline's competitive position and its recent route launches. It will also analyse its low-frequency schedule and high seasonality levels, in addition to its fleet strategy.