V Australia has applied to the International Air Services Commission (IASC) to operate services to Fiji from Dec-2009, requesting an allocation of 1,267 seats per week (The Australian, 14-Aug-09). The Virgin Blue Group also plans to transfer an additional 1,260 seats from Pacific Blue to V Australia for the service. IASC has requested other carriers interested in the capacity to provide an application by 27-Aug-09. The Commission has also allowed Pacific Blue to transfer 720 seats per week on Indonesian services to Pacific services, provided the carrier utilises the capacity by 01-Apr-2010.
V Australia applies to launch Fiji services
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Frontier to celebrate ULCC transition with an IPO: intensity grows in the US competitive landscape
After toying with the idea of engaging in an initial public offering for more than year, the US ULCC Frontier Airlines now intends to go public as its major shareholder, ULCC specialist Indigo Partners, sets its sights on Argentina. Frontier has arrived at and passed many ULCC milestones, including producing unit costs excluding fuel below the USD6 cent benchmark for the ULCC model, placing it on par with its fellow ULCCs Spirit Airlines and Allegiant.
Frontier markets its product differently from other US ULCCs, giving passengers the options to purchase product in a bundled form or a la carte, but it still maintains ultra low fares. However, Frontier couldn’t escape the pricing pressure that permeated the US market in 2016, joining the majority of the country’s airlines in posting distinct yield and unit revenue declines.
Obviously, despite the pricing pressure and changing dynamics in the US market, Frontier remains bullish on the opportunities for ULCCs in the market place, concluding that numerous markets exist for it to operate profitably with low fares.
During the past several years Frontier’s network focus has been somewhat murky. Now Frontier’s network strategy is targeting high fare, underserved routes. And like its rival Spirit, Frontier also singles out medium sized markets that offer some protection from larger competitors.
Indonesia refuses to approve Singapore Airlines and Lufthansa JV, protecting Garuda once again
Indonesia has taken another step backwards from liberalisation with moves that benefit flag carrier Garuda at the expense of Singapore Airlines (SIA). In the latest examples, Indonesia is refusing to approve SIA’s new joint venture with Lufthansa and allow SIA to launch a new fifth freedom route from Jakarta to Sydney.
Refusing to allow SIA and Lufthansa to coordinate prices and schedules in the Indonesia-Europe market may not have a significant impact on the overall SIA-Lufthansa JV. However, it is an unfortunate move by Indonesian authorities to protect Garuda ahead of the airline's potential launch of services to Germany.
Preventing or delaying SIA from launching Jakarta-Sydney has a bigger short term impact as it leaves in place – at least for now – the Garuda and Qantas duopoly in a growing market. SIA has also been temporarily stripped of 19 weekly slot pairs at Jakarta Soekarno-Hatta International Airport, in another related and seemingly protectionist move.