Japan Airlines – which officially emerged from court-promoted bankruptcy this week – has a domestic LCC on its radar with Jetstar the most likely partner. Jetstar will reportedly outline the business case for the Japanese to the Qantas board in coming weeks, according to reports in Japan and Australia.
As the Qantas subsidiary works on its “pan-Asian plan”, talk of a JV between Jetstar and Spring Airlines have proved unfounded. CEO Bruce Buchanan stated the carrier was “in the final stages” of negotiations with more than one Asian carrier to launch an LCC joint venture, with a geographic focus on North Asia.
Read full report: JAL again considers LCC with Jetstar after emerging from bankruptcy.
The UK’s Competition Commission (CC) stood by its earlier decision this week that BAA must sell London’s Stansted Airport and either Edinburgh or Glasgow in Scotland, following an appeal by Britain’s biggest airport operator.
The CC saw no “material changes” in circumstances since it handed down its decision on BAA’s dominance of British airports, and if anything stated conditions had improved for UK airports!
Manchester Airport Group, under new management led by Charles Cornish, is champing at the bit to acquire these assets but will events conspire against it? Read the full story: UK competition regulator upholds decision on BAA airport sales; MAG poised to bid.
Qantas this week reacted to rising fuel prices and a series of natural disasters in its neighbourhood – the Queensland and Victorian floods, Cyclone Yasi, and the Christchurch and Japan earthquakes – with a raft of cost-cutting measures.
Harking back to the darker days of the global financial crisis, Qantas announced reductions in domestic and international capacity, retirement of aircraft, reduction of management positions and ongoing fuel surcharges.
CEO Alan Joyce said it was too early to estimate the likely affect of these significant events on the Qantas Group’s result for FY2012. The bumpy ride for shareholders continues.
Airline share prices have recorded a slump of 10% so far this year, as IATA’s Airline Finance Monitor revealed the trend indicated that the negative correlation of airline shares with oil prices has returned.
“A larger sample of airline reporting 2010Q4 results confirmed earlier indications that the pace of improvement in profits slowed sharply, as rising fuel costs squeezed margins,” stated the Monitor.
See related article: Bahrain’s airlines adapting to political unrest
At the same time, Egypt is offering airlines incentives to resume services to the country in a bid to stimulate demand and stop carriers from cutting capacity. easyJet and TUI Travel confirmed they had received incentives in the form of reduced airport and passenger charges, worth about USD5 per passenger.
If Emirates is feeling it, you can bet a lot of other airlines are too. President Tim Clark stated the unrest could harm revenue at Emirates by 3-5%. He added that the present situation in Japan is having a negative influence on that market, adding that it could fall by 20-40%. He expected a huge influx when reconstruction work starts.
United Continental Holdings, in announcing capacity reductions to Japan, put travel demand in the “measurable decline” category.