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The mountainous terrain that characterises Pakistan means that air travel is one of the most convenient ways to travel to and around the country. Pakistan International Airlines is the country’s national flag carrier, majority owned by the government. PIA is one of the largest airlines in Asia operating an extensive domestic and international network from its main base at Jinnah International Airport.
The Pakistan Civil Aviation Authority regulates the Pakistani aviation industry, responsible for air navigation services and also manages most of the country’s airports.
Airports in Pakistan
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Singapore is seeing another surge in low-cost carrier capacity, led by aggressive expansion from Tigerair. LCC groups Jetstar and AirAsia are also continuing to expand in Singapore but more modestly than Tiger.
Tigerair, Jetstar and AirAsia had equal shares of the Singapore market back in 2010. But Tigerair has since grown faster and will widen the gap from its rivals as it adds five more A320s in the current fiscal year. Tigerair will account for almost 11% of total capacity at Singapore Changi by the end of 2013 compared to just under 8% for AirAsia and Jetstar.
LCCs already account for a little over 30% of seats at Singapore – an impressive figure given Changi’s LCC penetration rate was virtually zero a decade ago and its lack of a domestic market. Tigerair’s forthcoming expansion will drive up the LCC penetration further, to about 32%, but it comes with risks as Singapore’s short-haul market could return to the over-capacity situation seen two years ago.
Qantas and Virgin Australia appear to have reached an uneasy armistice in their domestic capacity war that added nearly 8% in seat capacity in the year to 30-Jun-2013. But a stay in hostilities is likely to be temporary at best, with neither side laying down arms.
Indeed, after Qantas offered an olive branch by stating it would limit its domestic capacity increases to between 1.5% and 2% for the first half of FY2014, Virgin Australia responded the next day by declaring it would grow capacity by up to double that amount. And that does not include any increase that its newly acquired 60% subsidiary Tigerair Australia may have planned.
Virgin Australia CEO John Borghetti also provocatively stated that Virgin Australia Regional Airlines, bolstered by the acquisition of Perth-based Skywest, will soon seek to break more Qantas monopoly routes, placing more pressure on fares and yields.
Two years into a five year transformation programme, Qantas sees the light at the end of the tunnel, reporting an underlying profit before tax of AUD192 million (USD172 million) for the financial year to 30-Jun-2013 against a backdrop of high fuel costs, excess domestic capacity and intense competition in its international markets.
The result, however, benefits from an AUD134 million (USD120 million) accounting estimate change relating to bringing forward accounting of passenger revenue. Without this adjustment the underlying result would have been AUD58 million (USD52 million).
But Qantas’ previously troubled international business is on the mend as the first benefits from the cornerstone alliance with Emirates begin to flow, costs are removed and loss making routes exited as well as aircraft reconfigured and alliances expanded, particularly in Asia.
CEO Alan Joyce stated: “Our financial position has been strengthened by the actions we have taken over past 12 months: reducing debt, extending our maturity profile and taking a prudent approach to capital expenditure". But Qantas has not provided profit guidance for the year ahead as the operating environment in the first half of FY2014 remains volatile.
Air New Zealand has reported underlying earnings of NZD256 million (USD200 million) for the financial year to 30-Jun-2013 and in so doing delivering on its promise to more than double profits on the prior year. The net profit after tax was NZD182 million (USD142 million), up 156% on the previous year.
The result, which is at the upper end of the guidance range provided in Jun-2013, follows up on the 300% improvement reported in the first half of FY2013 with all parts of the network contributing profitably.
Chairman John Palmer stated the result places Air New Zealand amongst the best performing airlines globally. “We are focused on further improving on this result in the 2014 financial year. Based on the airline’s forecast of market demand and fuel prices at current levels, early results and forward bookings are encouraging. Our expectation is that next year we will improve on the result that we have announced today.”
This is the third report in a three-part series on Jetstar’s Singapore-based operations, which includes Jetstar Asia, Jetstar Airways and Valuair. The first two reports analysed Jetstar’s position in two key markets, Singapore-Indonesia and Singapore-China. This report looks at other markets and Jetstar’s overall outlook in Singapore.
Over the last year Jetstar has slowed down fleet and ASK expansion from Singapore after a period of rapid capacity growth for all of the country’s major LCCs, intensifying competition and impacting profitability. Seat capacity, however, has continued to grow rapidly as Jetstar Asia has increased its focus on short-haul Southeast Asian markets, particularly Malaysia, while decreasing its focus on medium-haul flights to North Asia, particularly mainland China.
In the coming months Jetstar Asia/Valuair will take two more A320s for a total of 20 aircraft, with the additional capacity once again being allocated to short-haul markets, primarily neighbouring Malaysia and Indonesia.
This is the second report in a three-part series on Jetstar’s Singapore-based operations, which includes Jetstar Asia, Jetstar Airways and Valuair. The first report analysed the booming Singapore-Indonesia market, where Jetstar is now looking to expand after several years of flat capacity.
This report looks at Jetstar’s position in the Singapore-China market while the third part will look at the overall outlook for Jetstar Asia. Jetstar has significantly cut back in the China market since the end of 2011, reversing a strategy from 2010 and 2011 that focused on using its Singapore hub to pursue rapid growth throughout mainland China. This strategy included using Jetstar Asia’s A320 fleet to operate medium-haul flights to southern China while using Jetstar Airways’ A330 fleet to access markets in northern China that are beyond narrowbody range from Singapore.