AirAsia to move into Philippines market in 1Q2011
Southeast Asia's biggest LCC, AirAsia, confirmed it is "exploring the feasibility" of establishing a new airline JV in the Philippines. The airline already has successfully launched LCC subsidiaries in Thailand, Indonesia, with another planned JV in the Vietnam market.
- AirAsia is considering establishing a new airline joint venture in the Philippines, adding to its existing LCC subsidiaries in Thailand and Indonesia.
- The new airline JV in the Philippines is expected to launch domestic and international services in the first quarter of 2011.
- AirAsia is considering taking a 40% stake in the JV, with other shareholders including Antonio Cojuangco and President Benigno Aquino's cousin.
- Cebu Air and South East Asian Airlines have also announced plans for expansion and joint marketing ventures in the Southeast Asian market.
- JetBlue's shares fell by 4.0% due to a warning about weaker sales for the holiday season.
- Southwest Airlines reported a 4.7% year-on-year increase in passengers carried in November 2010, with a 7-8% increase in PRASM despite economic problems in the US.
According to an official involved in the talks, AirAsia is considering taking a 40% stake in the JV, with other shareholders to include Antonio Cojuangco, a former chairman of Philippine Long Distance Telephone Co and President Benigno Aquino's cousin. The new airline is expected to launch domestic and international services in 1Q2011. The move follows Cebu Air's plans to expand its fleet and route network and South East Asian Airlines' launch of a joint marketing venture with Tiger Airways.
AirAsia shares gained 4.2% yesterday. Tiger was unchanged and Cebu Air fell 0.2%.
JetBlue falls on outlook warning
JetBlue posted the sharpest fall yesterday, losing 4.0%. While the mood is generally bullish within the US airline industry, JetBlue CFO Ed Barnes yesterday warned sales for the holiday season could be weaker than expected and lowered his guidance for the period.
Also in the US, Southwest Airlines announced it carried 7.4 million passenger in Nov-2010, a 4.7% year-on-year increase. PRASM increased 7-8% year-on-year, which CFO Laura Wright described as "pretty remarkable" in light of recent economic problems in the country.
Selected LCCs daily share price movements (% change): 08-Dec-2010
Source: Centre for Asia Pacific Aviation, Yahoo! Finance & Reuters