Lonrho reported (27-Jul-2011) revenue in the three months ended 30-Jun-2011 (3Q) of GBP35.1 million, a 31.1% year-on-year increase and a 19.1% increase on a like-for-like basis (excluding acquisitions and disposals). All five divisions within the group showed at least double digit growth on the prior year. Fly540, having seen the full roll out of services in Angola, as well as a ramp up of operations in Tanzania, has achieved turnover growth of 25.6% in the quarter. The company stated the business is "still experiencing some delays" in deploying sufficient aircraft in Angola to service the demand that is being seen on many routes but aircraft arrivals in Aug-2011 and Sep-2011 will increase capacity significantly. High fuel prices and aggressive pricing policies from competitors in Kenya specifically mean that margins in the business remain under pressure in the short term, the company stated. Fly540 is on track to open its third hub in Ghana by Oct-2011. Lonrho noted that the fourth quarter is the most significant for the Group in terms of revenue and profitability and will have a significant impact on results for the financial year. Lonrho commented that with the further expansion of Fly540, the acquisitions of Grindrod PCA and Fish On Line and the implementation of new contracts at Oceanfresh, the "building blocks are in place to deliver results in line with market expectations". [more]
Lonrho reports 31% inrease in 3Q revenues; Fly540 reports revenue growth of 25.6%
You may also be interested in the following articles...
Pobeda: Aeroflot's fast-growing LCC hs become a key part of its multi-brand strategy
Two years on from its Dec-2014 launch Aeroflot's LCC subsidiary Pobeda is firmly established as the fifth largest airline in Russia by seats, with a 6.8% share in the domestic market (week of 19-Dec-2016, source: OAG). Bucking the trend of declining traffic in the Russian market – which is being dragged down by falling international demand – Pobeda is growing rapidly.
Although still strongly domestically focused, the Moscow Vnukovo-based airline commenced international operations in Feb-2016 and will have launched 12 international routes during the course of 2016.
On a city pair basis, 23 of the 41 Pobeda routes in 2016 are not operated by other Aeroflot Group airlines. There are 17 Moscow routes (and one from Saint Petersburg) flown by both Pobeda and Aeroflot from different airports. An important part of the Aeroflot Group's multi-brand strategy, Pobeda is the only LCC in Russia and has stimulated demand among price-sensitive passengers in point-to-point markets.
SAS eyes lower labour cost bases outside Scandinavia as the airline's margin starts to fall again
A harsh truth for SAS is that improvements to its network and product, and its focus on Scandinavia's frequent travellers, have not isolated it from unit revenue weakness. Moreover, in spite of very creditable progress with unit cost reduction, it still has a high cost base. In FY2016 its operating margin started to turn down again. In addition to further targeted cost savings SAS is now considering further, more radical, changes to its production model.
In particular, it is assessing whether or not to establish operations outside Scandinavia for some of its European traffic. The European airline market includes a fast-growing and price-sensitive leisure segment, where SAS tries to compete against much lower cost operators that are not weighed down by Scandinavia's very high labour costs.
Even Scandinavia's most significant LCC, Norwegian, has established bases in the UK and Spain, and many other LCC competitors have bases across the continent. Indeed, it would seem that SAS, once an opponent of Norwegian's plans to use Ireland as a trans-Atlantic base in search of lower labour costs, has borrowed a page from its rival's book on how to re-write airline strategy.