Institutional invest-ors are flocking back to the aviation sector. After mon-ths long futile efforts to raise funds, three leading domestic airlines — Jet Airways, SpiceJet and Kingfisher Airlines have hit the market once again to raise funds.
While SpiceJet is close to raising $100 million, Jet is hoping to raise $150-200 million — all through qualified institutional placement (QIP).
An investment banker familiar with SpiceJet’s move said the airline has almost sewed up the QIP.
Kingfisher is also hoping to raise funds, either through private equity or QIP. It had received shareholders’ nod to raise $100 million.
On December 24, Jet Airways received clearance from the Cabinet Committee on Economic Affairs (CCEA) to raise $400 million from investors through QIP. The proposal was made to the Foreign Investment Promotion Board (FIPB), which referred it to the cabinet.
Jet needed to induce fresh equity to service an estimated long-term debt of Rs 11,500 crore, and short-term debt of Rs 3,500 crore. It reported a loss of Rs 406.7 crore in the second quarter (July-September), up from Rs 384.5 crore loss in the same period last year.
A Mumbai-based investment banker said the aviation sector is slowly beginning to buzz, with the fortunes turning around. “The October-December period has turned out to be an excellent quarter in terms of passenger traffic and occupancy. Some airlines are already talking about enhancing capacities,” he said, adding that there is a marked improvement in the confidence level.
An aviation analyst with domestic brokerage said that Jet Airways is in a better position to raise funds because of its financial condition and reputation among investors. On the flip side, Kingfisher’s parent UB Group has been providing collaterals to raise funds for the airline.
He however said Kingfisher might succeed in raising $100 million, but would come at a high cost. “In case of Jet Airways, it is expected to raise around $150-200 million. Since it is expected to report profit in this quarter on the back of its low-cost service Jet Airways Konnect, it will raise funds at low interest rates.”
Due to the presence of global investor Wilbur Ross in SpiceJet, investors are willing to invest money in the no-frills airline.
SpiceJet is expected report profit by the end of the current financial year on the back of improved occupancy, according to the airline
Source: MyDigitalFC
Thursday, December 31, 2009
Tuesday, December 29, 2009
Airfares may soar 25% in January-2010
Flying in the New Year will be costly. Domestic airlines such as Jet Airways, Air India, Kingfisher Airlines and low-cost carriers are considering raising air fares by up to 25%, in January, encouraged by the recent rise in air travel and a higher passenger load factor.
A few airline companies have already hiked fares on select and profitable routes, according to people connected with the development. “There could be an average 25% hike in fares in the coming weeks across the country,” said a spokesperson for Jet Airways, one of India’s largest air carriers. “There are sectors like Goa where a 40% increase in fares has already been effected,” the spokesperson added.
State-owned national carrier Air India said 90% of the seats in most routes were already booked and the remaining would be sold at a higher price bracket, while the Vijay Mallya-owned Kingfisher Airlines has said it is actively evaluating a possible hike in fares. “We always believe in being competitively priced such that it reflects our service quality and if there are opportunities to improve yields, we would always evaluate the same,” said a Kingfisher Airlines spokesperson.
Post the hike, a Mumbai-Delhi full service carrier air ticket would cost anywhere between Rs 9,000 to Rs 14,000, whereas budget carriers ticket would cost around Rs 8,000, including taxes during non-peak hours. In fact, a few budget carriers have already increased fares. A low-cost carrier ticket for Mumbai-Kolkata sector was available for Rs 4,000 a month back, but it now costs Rs 6,000.
The fare hike is seen linked to improving macro factors as passenger traffic has heightened since the past month. Moreover, with airlines wanting to cash in on the peak season and on the New Year holiday rush, the increase in passenger load for most airlines has been an average 30%. The industry-wide load factor for this quarter is about 75% and in some sectors it has touched 90%.
“Airlines are making double profit these days as fares have gone up and loads are also high,” said Ashwini Kakkar, executive vice chairman of Mercury Travels. “Bookings for the first weekend in January are absolutely full. The last few seats in an airline are sold at Rs 20,000 and above in the metro sectors.” According to Ajay Prakash, general secretary of the Travel Agents Federation of India, “Fares have already been increased in a few sectors and we’re getting indications about another 20% hike. Flights are full and the availability of seats is low.”
Airlines have been eager to raise fares as they have been reeling under huge losses after indulging in aggressive price cuts in the past to attract passengers. Record-high oil prices in 2007 and a plethora of charges levied by airports that were privatised, deeply affected airlines’ profitability. Their woes compounded after passengers switched to the railways, when the slowdown led to fears of job losses.
A senior SpiceJet official said that ticket prices would firm up by 15% compared with last year’s prices in the same period. GoAir and Paramount Airways didn’t respond to ET’s queries. “Many airlines are reporting healthier passenger loads. Business is bouncing back and airlines are beginning to break even,” said Kapil Kaul, CEO, South Asia of Centre for Asia Pacific Aviation, a Singapore-based aviation agency that tracks trends.
Source: Economic Times
A few airline companies have already hiked fares on select and profitable routes, according to people connected with the development. “There could be an average 25% hike in fares in the coming weeks across the country,” said a spokesperson for Jet Airways, one of India’s largest air carriers. “There are sectors like Goa where a 40% increase in fares has already been effected,” the spokesperson added.
State-owned national carrier Air India said 90% of the seats in most routes were already booked and the remaining would be sold at a higher price bracket, while the Vijay Mallya-owned Kingfisher Airlines has said it is actively evaluating a possible hike in fares. “We always believe in being competitively priced such that it reflects our service quality and if there are opportunities to improve yields, we would always evaluate the same,” said a Kingfisher Airlines spokesperson.
Post the hike, a Mumbai-Delhi full service carrier air ticket would cost anywhere between Rs 9,000 to Rs 14,000, whereas budget carriers ticket would cost around Rs 8,000, including taxes during non-peak hours. In fact, a few budget carriers have already increased fares. A low-cost carrier ticket for Mumbai-Kolkata sector was available for Rs 4,000 a month back, but it now costs Rs 6,000.
The fare hike is seen linked to improving macro factors as passenger traffic has heightened since the past month. Moreover, with airlines wanting to cash in on the peak season and on the New Year holiday rush, the increase in passenger load for most airlines has been an average 30%. The industry-wide load factor for this quarter is about 75% and in some sectors it has touched 90%.
“Airlines are making double profit these days as fares have gone up and loads are also high,” said Ashwini Kakkar, executive vice chairman of Mercury Travels. “Bookings for the first weekend in January are absolutely full. The last few seats in an airline are sold at Rs 20,000 and above in the metro sectors.” According to Ajay Prakash, general secretary of the Travel Agents Federation of India, “Fares have already been increased in a few sectors and we’re getting indications about another 20% hike. Flights are full and the availability of seats is low.”
Airlines have been eager to raise fares as they have been reeling under huge losses after indulging in aggressive price cuts in the past to attract passengers. Record-high oil prices in 2007 and a plethora of charges levied by airports that were privatised, deeply affected airlines’ profitability. Their woes compounded after passengers switched to the railways, when the slowdown led to fears of job losses.
A senior SpiceJet official said that ticket prices would firm up by 15% compared with last year’s prices in the same period. GoAir and Paramount Airways didn’t respond to ET’s queries. “Many airlines are reporting healthier passenger loads. Business is bouncing back and airlines are beginning to break even,” said Kapil Kaul, CEO, South Asia of Centre for Asia Pacific Aviation, a Singapore-based aviation agency that tracks trends.
Source: Economic Times
Monday, December 28, 2009
Air India plane hit by stone, Jet blast to blame
IGI Airport's taxiways seem as dangerous for aircraft as Delhi's roads are for its motorists. On Sunday evening, an Air India A-321 aircraft was damaged when, during a jet blast from a Jet Airways flight in front of it, a 'foreign object' from the ground hit its windshield. The flight, carrying 162 passengers, had to return to the parking bay where passengers were made to board another aircraft.
The flight — Delhi-Mumbai IC 683 — was in line for take-off at the taxiing bay around 5pm when the pilot of Jet Airways flight 9W 334 from Delhi to Mumbai applied throttle. The ensuing blast from the engine was so powerful that some foreign material, stones and dust flung onto and cracked the windshield of the Air India aircraft.
"With the aircraft damaged, there was no way we could have operated it. It was turned back to the bay and passengers were made to disembark. Later, we arranged for another aircraft which flew the passengers to Mumbai. Instead of its scheduled departure at 5pm, the flight finally took off at 7.30pm," said an Air India official.
According to sources, the taxiway where the incident occurred was cluttered with small stones and other construction material due to ongoing work at taxiway Echo.
While Jet Airways did not officially comment on the issue, sources said the maintenance of the airside was in a highly poor condition and the accident could have been avoided had the taxiway been clear.
"It is only providence that an aircraft got damaged in the blast. Had the stone that damaged the windshield hit a person, it would surely have been fatal. Such instances have also happened in the past where not just stones but trolleys and ladders have flung around during jet blasts. The airport manager must ensure that the airside is absolutely sanitised and all care is maintained," said sources.
Delhi International Airport (P) Ltd (DIAL) officials did comment on the condition of the runway though they did confirm that the accident had taken place, even though their version was at variance with that of Air India's.
"Prima facie, it appears that a departing Jet Airways aircraft increased thrust while taxiing out, resulting in a jet blast that caused damage to the door of an Air India aircraft parked on the adjacent bay. The matter has been referred to DGCA which will be investigating the incident," said a spokesperson.
Source: Times of India
The flight — Delhi-Mumbai IC 683 — was in line for take-off at the taxiing bay around 5pm when the pilot of Jet Airways flight 9W 334 from Delhi to Mumbai applied throttle. The ensuing blast from the engine was so powerful that some foreign material, stones and dust flung onto and cracked the windshield of the Air India aircraft.
"With the aircraft damaged, there was no way we could have operated it. It was turned back to the bay and passengers were made to disembark. Later, we arranged for another aircraft which flew the passengers to Mumbai. Instead of its scheduled departure at 5pm, the flight finally took off at 7.30pm," said an Air India official.
According to sources, the taxiway where the incident occurred was cluttered with small stones and other construction material due to ongoing work at taxiway Echo.
While Jet Airways did not officially comment on the issue, sources said the maintenance of the airside was in a highly poor condition and the accident could have been avoided had the taxiway been clear.
"It is only providence that an aircraft got damaged in the blast. Had the stone that damaged the windshield hit a person, it would surely have been fatal. Such instances have also happened in the past where not just stones but trolleys and ladders have flung around during jet blasts. The airport manager must ensure that the airside is absolutely sanitised and all care is maintained," said sources.
Delhi International Airport (P) Ltd (DIAL) officials did comment on the condition of the runway though they did confirm that the accident had taken place, even though their version was at variance with that of Air India's.
"Prima facie, it appears that a departing Jet Airways aircraft increased thrust while taxiing out, resulting in a jet blast that caused damage to the door of an Air India aircraft parked on the adjacent bay. The matter has been referred to DGCA which will be investigating the incident," said a spokesperson.
Source: Times of India
Thursday, December 24, 2009
Indian airlines to return to profit: Report
India's private airlines can look forward to a return to profit in the next financial year after two turbulent years of losses, an industry report forecast Thursday.
With the economy rebounding, private carriers are expected to post a total profit of 250 million dollars to 300 million dollars in the next fiscal year starting in April, the Centre for Asia Pacific Aviation said in a report.
The carriers include Jet Airways, SpiceJet, Kingfisher Airlines Ltd. and Indigo Airlines.
"After a turbulent couple of years, 2010 should be a more positive year for Indian aviation, provided that the airlines can remain disciplined on costs, capacity and pricing," the aviation consultancy said.
But state-run flagship carrier Air India will remain in the red next year, the Sydney-based consultancy said, dragged down by high operational costs and a fall in passengers.
"Air India will continue to have cash deficits for the next five to seven years, which could cumulatively amount to four-to-five billion dollars, the report said.
Total airline losses for the current fiscal year are expected to total 1.5 to 1.6 billion dollars of which Air India will account for at least half, Kapil Kaul, chief executive in India for the Singapore-based Centre for Asia-Pacific Aviation, told AFP.
The combined losses have narrowed from last year's two billion dollars.
After the government opened India's skies to more competition in 2004, a clutch of new airlines took flight amid predictions of double-digit passenger growth.
But costlier fuel pushed up fares, sending many passengers back to trains. The sector was also hit by a slowing economy, which further reduced travel, and created overcapacity and fierce price wars.
"Domestic traffic is expected to post an expansion of 15 percent or more in 2010-11 as the industry returns to its long-term growth trajectory," the report said.
International traffic growth is expected to grow by 10 to 12 percent, it added.
Source: Economic Times
With the economy rebounding, private carriers are expected to post a total profit of 250 million dollars to 300 million dollars in the next fiscal year starting in April, the Centre for Asia Pacific Aviation said in a report.
The carriers include Jet Airways, SpiceJet, Kingfisher Airlines Ltd. and Indigo Airlines.
"After a turbulent couple of years, 2010 should be a more positive year for Indian aviation, provided that the airlines can remain disciplined on costs, capacity and pricing," the aviation consultancy said.
But state-run flagship carrier Air India will remain in the red next year, the Sydney-based consultancy said, dragged down by high operational costs and a fall in passengers.
"Air India will continue to have cash deficits for the next five to seven years, which could cumulatively amount to four-to-five billion dollars, the report said.
Total airline losses for the current fiscal year are expected to total 1.5 to 1.6 billion dollars of which Air India will account for at least half, Kapil Kaul, chief executive in India for the Singapore-based Centre for Asia-Pacific Aviation, told AFP.
The combined losses have narrowed from last year's two billion dollars.
After the government opened India's skies to more competition in 2004, a clutch of new airlines took flight amid predictions of double-digit passenger growth.
But costlier fuel pushed up fares, sending many passengers back to trains. The sector was also hit by a slowing economy, which further reduced travel, and created overcapacity and fierce price wars.
"Domestic traffic is expected to post an expansion of 15 percent or more in 2010-11 as the industry returns to its long-term growth trajectory," the report said.
International traffic growth is expected to grow by 10 to 12 percent, it added.
Source: Economic Times
Tuesday, December 22, 2009
Aviation sector in cruise mode, traffic rises 25% during Oct-Nov
The aviation industry is headed towards its busiest three months ever with the number of passengers jumping over 25% during October-November 2009 over the year-ago period, indicating clear revival in demand for air traffic. Airlines’ executives said that while flights to metro cities saw a surge in passenger traffic, leisure travel to destinations in Goa and Kerala came as an added bonus.
As per the data available with the Directorate General of Civil Aviation (DGCA), in November an estimated 40 lakh passengers travelled compared with 30.48 lakh in the same month last year. In October 2009, too, 40 lakh passengers had travelled on airlines compared with 32 lakh passenger in the year-ago period.
This has lifted the overall passenger traffic, which has been lagging since 2008. During January-November 2009, 400 lakh passengers travelled, an increase of 5.45% over same period 2008. Airline companies said the sharp pick-up in air traffic over the past two months is due to increase in both business and leisure travel, and would allow them to improve their financial performance, as fuel cost has not swung too sharply during the past one quarter.
Ankur Bhatia, managing director of an IT company that provides distribution solutions to travel firms, Amadeus India, said: “Our statistics indicate that December alone would see an increase of 40% over December last year in terms of airline ticket sales and passenger traffic.”
This should bring some cheer to airline operators, who have been laden with losses, as falling demand due to the economic slowdown and rise in fuel cost over the past few years cut into margins. Sanjay Aggarwal, CEO, SpiceJet, said October and November this year were even bigger than the two months in 2007 when the economy was still growing at a fast clip.
“Compared with 2007, passenger traffic is up 6-7%. Last year, it was pretty depressed due to the economic slowdown and thereafter, the terror attacks in Mumbai. This quarter is going to be the best quarter for the aviation industry in terms of demand,” he said.
Mr Aggarwal added that if fuel prices remain stable and there are no sharp swing in currency exchange rates, SpiceJet may post profits for the fiscal ending March 2010. The spokesperson for another low-cost airline GoAir said: “It seems to be the best quarter the aviation industry has witnessed in a long time. The demand for October-December has been good and we are now looking forward to the January-March quarter 2010.”
Source: The Economic Times
As per the data available with the Directorate General of Civil Aviation (DGCA), in November an estimated 40 lakh passengers travelled compared with 30.48 lakh in the same month last year. In October 2009, too, 40 lakh passengers had travelled on airlines compared with 32 lakh passenger in the year-ago period.
This has lifted the overall passenger traffic, which has been lagging since 2008. During January-November 2009, 400 lakh passengers travelled, an increase of 5.45% over same period 2008. Airline companies said the sharp pick-up in air traffic over the past two months is due to increase in both business and leisure travel, and would allow them to improve their financial performance, as fuel cost has not swung too sharply during the past one quarter.
Ankur Bhatia, managing director of an IT company that provides distribution solutions to travel firms, Amadeus India, said: “Our statistics indicate that December alone would see an increase of 40% over December last year in terms of airline ticket sales and passenger traffic.”
This should bring some cheer to airline operators, who have been laden with losses, as falling demand due to the economic slowdown and rise in fuel cost over the past few years cut into margins. Sanjay Aggarwal, CEO, SpiceJet, said October and November this year were even bigger than the two months in 2007 when the economy was still growing at a fast clip.
“Compared with 2007, passenger traffic is up 6-7%. Last year, it was pretty depressed due to the economic slowdown and thereafter, the terror attacks in Mumbai. This quarter is going to be the best quarter for the aviation industry in terms of demand,” he said.
Mr Aggarwal added that if fuel prices remain stable and there are no sharp swing in currency exchange rates, SpiceJet may post profits for the fiscal ending March 2010. The spokesperson for another low-cost airline GoAir said: “It seems to be the best quarter the aviation industry has witnessed in a long time. The demand for October-December has been good and we are now looking forward to the January-March quarter 2010.”
Source: The Economic Times
Monday, December 21, 2009
Flights delayed due to poor visibility
Poor visibility and a defunct Instrument Landing System (ILS) resulted in flight delays at the Chandigarh airport on Sunday as well. Some of the morning flights from Chandigarh were delayed due to poor visibility.
The Kingfisher Airlines flight for Delhi was delayed by almost 40 minutes. It departed at 4:20 pm against its scheduled departure of 3:40 pm. Also, the flight to Jammu was delayed by one and a half hour. It departed around 11:05 am against its scheduled departure of 9:35 am. This is a halt flight for Delhi which goes to Jammu and Srinagar.
Similarly, the Jet Airways flight for Mumbai was delayed by an hour. Also, the Jet flight for Delhi departed at 11:55 am against its departure time of 10:35 am. The other flights including Go-Air and Indian Airlines were running as per schedule.
Source: Indian Express
The Kingfisher Airlines flight for Delhi was delayed by almost 40 minutes. It departed at 4:20 pm against its scheduled departure of 3:40 pm. Also, the flight to Jammu was delayed by one and a half hour. It departed around 11:05 am against its scheduled departure of 9:35 am. This is a halt flight for Delhi which goes to Jammu and Srinagar.
Similarly, the Jet Airways flight for Mumbai was delayed by an hour. Also, the Jet flight for Delhi departed at 11:55 am against its departure time of 10:35 am. The other flights including Go-Air and Indian Airlines were running as per schedule.
Source: Indian Express
Thursday, December 17, 2009
Singapore Airlines To Make Capacity Adjustments
Singapore Airlines is to make changes to its route network in the coming months that will include frequency increases on several routes. The changes will also include the suspension of operations to Pakistan as well as Nanjing in China.
Changes will begin to be seen from this month, when Singapore-Moscow-Houston flight frequency will increase to five per week from four, effective 18 December.
From 19 January 2010, non-stop Singapore-Newark flights will return to daily operations from the current five-times-weekly.
As already announced, Munich will be a new destination in the SIA network from the start of the northern summer schedule late in March 2010. Flights will operate five times per week on a Singapore-Munich-Manchester routing. Manchester services will be increased to five-times-weekly from thrice-weekly as a result.
Also from the start of the summer season in 2010, Colombo and Dhaka will each be served daily, up from five flights per week.
Frequency of Mumbai-Singapore and Delhi-Singapore Flights will meanwhile be increased from March and June 2010, respectively. Flights will be operated twice-daily to both Indian cities, up from the existing 11-times-weekly.
Services to Seoul will also increase from June 2010, to 18-times-weekly from 14-times-weekly. One of the daily flights carries on to San Francisco.
In addition, as previously announced SIA will begin serving Tokyo Haneda airport with two daily flights from the end of October 2010, complementing the existing twice-daily flights to Tokyo Narita, one of which continues on to Los Angeles.
The difficult decision has meanwhile been taken to suspend twice-weekly operations to Pakistan and Nanjing. The last Singapore-Karachi-Lahore service will be operated on 17 February 2010 while the last Singapore-Nanjing service will be operated on 26 March 2010. These suspensions are regrettable but are necessary as a result of the performance of the two routes. SIA will be assisting affected customers in making alternative travel arrangements.
Frequency will also be reduced in other areas of the network. From January 2010, Ho Chi Minh City will be served 14 times per week instead of 18 times while Kuala Lumpur will be served 17 times per week rather than 24. However overall SIA Group flight frequency on the Singapore-Kuala Lumpur route will remain unchanged at 54 per week as SilkAir will be taking over the operation of one of SIA’s daily services.
Positive signs of a recovery in demand continue to be seen but operating conditions remain challenging and yields in particular remain under pressure. SIA will continue to carefully match capacity to demand across the network and customers will be informed at the earliest opportunity where changes are made.
Source: The Financial
Changes will begin to be seen from this month, when Singapore-Moscow-Houston flight frequency will increase to five per week from four, effective 18 December.
From 19 January 2010, non-stop Singapore-Newark flights will return to daily operations from the current five-times-weekly.
As already announced, Munich will be a new destination in the SIA network from the start of the northern summer schedule late in March 2010. Flights will operate five times per week on a Singapore-Munich-Manchester routing. Manchester services will be increased to five-times-weekly from thrice-weekly as a result.
Also from the start of the summer season in 2010, Colombo and Dhaka will each be served daily, up from five flights per week.
Frequency of Mumbai-Singapore and Delhi-Singapore Flights will meanwhile be increased from March and June 2010, respectively. Flights will be operated twice-daily to both Indian cities, up from the existing 11-times-weekly.
Services to Seoul will also increase from June 2010, to 18-times-weekly from 14-times-weekly. One of the daily flights carries on to San Francisco.
In addition, as previously announced SIA will begin serving Tokyo Haneda airport with two daily flights from the end of October 2010, complementing the existing twice-daily flights to Tokyo Narita, one of which continues on to Los Angeles.
The difficult decision has meanwhile been taken to suspend twice-weekly operations to Pakistan and Nanjing. The last Singapore-Karachi-Lahore service will be operated on 17 February 2010 while the last Singapore-Nanjing service will be operated on 26 March 2010. These suspensions are regrettable but are necessary as a result of the performance of the two routes. SIA will be assisting affected customers in making alternative travel arrangements.
Frequency will also be reduced in other areas of the network. From January 2010, Ho Chi Minh City will be served 14 times per week instead of 18 times while Kuala Lumpur will be served 17 times per week rather than 24. However overall SIA Group flight frequency on the Singapore-Kuala Lumpur route will remain unchanged at 54 per week as SilkAir will be taking over the operation of one of SIA’s daily services.
Positive signs of a recovery in demand continue to be seen but operating conditions remain challenging and yields in particular remain under pressure. SIA will continue to carefully match capacity to demand across the network and customers will be informed at the earliest opportunity where changes are made.
Source: The Financial
Thursday, December 10, 2009
Emirates announces flights to Amsterdam
Emirates is to launch flights from it’s Dubai hub to Amsterdam from May 1, 2010. The airline is also promising further new route announcements in the coming months. The daily, non- stop service from Dubai will be operated with a combination of 777- 200LR and 777- 300ER aircraft. Emirates, with its Private Suites, will be the only airline offering First Class accommodation on the route. The flight will leave Dubai each day at 0825 hrs and arrive in Amsterdam at 1330 hrs. From Amsterdam, the plane departs at 1530 hrs and arrives in Dubai at 2359 hrs.
Source: Mail Today
Source: Mail Today
Wednesday, December 9, 2009
Jet’s November passenger traffic up by 33%
With a slew of restructuring measures paying off and the economy rebounding, Jet Airways has reported a 33 per cent increase in its domestic passenger traffic for the month of November 2009, as compared to the same period last year.
The airlines’ international passenger traffic has also registered a growth of 19 per cent on a seat factor of 81.9 per cent in November 2009, the airline said.
JetLite, the wholly owned subsidiary of Jet Airways has also done well in increasing its passenger traffic by 22 per cent and a seat factor of 76.7 per cent in the month of November 2009.
“Our improved performance in November 2009 is largely due rise in domestic and international travel following the recovery in the economy and a series of restructuring exercise undertaken recently,” Nikos Kardassis, CEO, Jet Airways told Hindustan Times.
“We have also seen rise in the yields. For December and January we have seen encouraging bookings and expect these months to be better than November,” he said.
In a bid to create a larger customer base and offer enhanced services to its international and domestic travelers, Jet Airways plans to develop Delhi and Mumbai as major hubs to international destinations.
Source: Hindustan Times
The airlines’ international passenger traffic has also registered a growth of 19 per cent on a seat factor of 81.9 per cent in November 2009, the airline said.
JetLite, the wholly owned subsidiary of Jet Airways has also done well in increasing its passenger traffic by 22 per cent and a seat factor of 76.7 per cent in the month of November 2009.
“Our improved performance in November 2009 is largely due rise in domestic and international travel following the recovery in the economy and a series of restructuring exercise undertaken recently,” Nikos Kardassis, CEO, Jet Airways told Hindustan Times.
“We have also seen rise in the yields. For December and January we have seen encouraging bookings and expect these months to be better than November,” he said.
In a bid to create a larger customer base and offer enhanced services to its international and domestic travelers, Jet Airways plans to develop Delhi and Mumbai as major hubs to international destinations.
Source: Hindustan Times
Tuesday, December 8, 2009
Paramount hopes to be back in air today
The Chennai-based Paramount Airways is hopeful of operating all its scheduled flights from Tuesday.
High Court Order
The airline late on Monday issued a statement that the Delhi High Court had given a “favourable” order against the decision of the Directorate-General of Civil Aviation (DGCA) to de-register three of the airlines' five aircraft. “The Court has asked DGCA to set aside the de-registration immediately and allow resumption of flights using the three de-registered aircraft,” the statement adds.
3 planes deregistered
Last Friday, the DGCA had de-registered three aircraft that forced the airline to cancel a number of flights. The decision to de-register the aircraft was taken after GECAS, the lessor of the aircraft, claimed that the airline had defaulted on payment of lease charges.
$15-m deposit
The Paramount statement, which states that the airline had earlier received a favourable verdict in the London High Court, adds that it had paid a $15-million deposit to GECAS.
Bookings hit
Soon after the aircraft were de-registered the airline stopped accepting bookings for a number of sectors including Bangalore, Visakhapatnam and Coimbatore. The airline, which took to the skies in October 2005, flies to 16 destinations across the country and operates 72 daily flights..
Till late Monday evening there was no response from the authorities about when the airlines' aircraft would be re-registered and allowed to begin normal operations.
Source: The Hindu Business Line
High Court Order
The airline late on Monday issued a statement that the Delhi High Court had given a “favourable” order against the decision of the Directorate-General of Civil Aviation (DGCA) to de-register three of the airlines' five aircraft. “The Court has asked DGCA to set aside the de-registration immediately and allow resumption of flights using the three de-registered aircraft,” the statement adds.
3 planes deregistered
Last Friday, the DGCA had de-registered three aircraft that forced the airline to cancel a number of flights. The decision to de-register the aircraft was taken after GECAS, the lessor of the aircraft, claimed that the airline had defaulted on payment of lease charges.
$15-m deposit
The Paramount statement, which states that the airline had earlier received a favourable verdict in the London High Court, adds that it had paid a $15-million deposit to GECAS.
Bookings hit
Soon after the aircraft were de-registered the airline stopped accepting bookings for a number of sectors including Bangalore, Visakhapatnam and Coimbatore. The airline, which took to the skies in October 2005, flies to 16 destinations across the country and operates 72 daily flights..
Till late Monday evening there was no response from the authorities about when the airlines' aircraft would be re-registered and allowed to begin normal operations.
Source: The Hindu Business Line
Monday, December 7, 2009
Low-cost domestic carriers raise airfares on busy routes
Crippled by financial setbacks and a dip in revenues, domestic air carriers have more than doubled the fares on select metro routes ahead of a long festive season, as compared to the fares four months ago. While a Delhi-Mumbai one-way ticket priced at the lowest fare cost around Rs 2,300 in August this year, it has more than doubled to Rs 4,900 now, if booked 10 days in advance.
All the five low-cost carriers — Go Air, Indigo, SpiceJet, JetLite (erstwhile Air Sahara), Kingfisher Red (erstwhile Air Deccan) — are charging upwards of Rs 4,500 one-way to connect any two of the four major metro cities. Flyers will have to shell out around Rs 5,700 as one-way fare from Delhi to Bangalore, which used to cost around Rs 2,500 four months ago. Similarly, the Delhi-Chennai one-way fare totals to around Rs 5,400 now as compared to Rs 2,900 four months ago.
Aviation experts say that the recent hike could be explained by multiple factors which have affected the airline industry. “Airlines have posted significant losses recently; now they are trying to maximise the recoveries by hiking fares on metro routes that have high load factors,” said Kapil Arora, partner (advisory services), Ernst and Young Pvt Ltd. The pricing that was adopted by domestic carriers till a few months ago, said Arora, was highly irrational and was even below cost. “Airlines have started pricing rationally in select sectors to bring closer the break-even point,” he added. In the second quarter of 2009-10, the balance sheet of all listed airlines was splattered with red. Vijay Mallya-promoted Kingfisher Airlines posted a loss of Rs 419 crore, Jet Airways suffered a loss of Rs 409 crore and low-cost carrier SpiceJet incurred a loss of Rs 101 crore in Q2 2009-10.
Source: The Indian Express
All the five low-cost carriers — Go Air, Indigo, SpiceJet, JetLite (erstwhile Air Sahara), Kingfisher Red (erstwhile Air Deccan) — are charging upwards of Rs 4,500 one-way to connect any two of the four major metro cities. Flyers will have to shell out around Rs 5,700 as one-way fare from Delhi to Bangalore, which used to cost around Rs 2,500 four months ago. Similarly, the Delhi-Chennai one-way fare totals to around Rs 5,400 now as compared to Rs 2,900 four months ago.
Aviation experts say that the recent hike could be explained by multiple factors which have affected the airline industry. “Airlines have posted significant losses recently; now they are trying to maximise the recoveries by hiking fares on metro routes that have high load factors,” said Kapil Arora, partner (advisory services), Ernst and Young Pvt Ltd. The pricing that was adopted by domestic carriers till a few months ago, said Arora, was highly irrational and was even below cost. “Airlines have started pricing rationally in select sectors to bring closer the break-even point,” he added. In the second quarter of 2009-10, the balance sheet of all listed airlines was splattered with red. Vijay Mallya-promoted Kingfisher Airlines posted a loss of Rs 419 crore, Jet Airways suffered a loss of Rs 409 crore and low-cost carrier SpiceJet incurred a loss of Rs 101 crore in Q2 2009-10.
Source: The Indian Express
Friday, December 4, 2009
British Airways to compensate buyers of $40 US-India tickets
British Airways flightBritish Airways will compensate 2,200 people who had bought the $40 tickets between the United States and India on October 2 after the carrier had mistakenly posted the wrong fare on its website.
The airline had cancelled the bookings and offered all affected passengers a travel voucher of $300.
An official statement said British Airways, in an agreement with the US department of transportations aviation enforcement office will compensate consumers for cancellation penalties and other expenses incurred due to the carriers erroneous offer of $40 fare between the US and India.
"This agreement with British Airways will compensate passengers for losses they suffered as a result of the carriers mistaken fare offer," transportation secretary Ray LaHood said.
The lowest US-India fare being offered by British Airways prior to the mistaken ad, not including taxes, was over $750.
The $40 fare, which did not includes taxes and fees, was posted on British Airways own website at about 6.30 pm on October 2.
The carrier realised its error and removed the fare within minutes from its own website, but it remained on the websites of certain on-line travel agents for about two hours. During this time, more than 1,200 bookings were made covering approximately 2,200 passengers.
In consultation with the Aviation Enforcement Office, British Airways has now agreed to reimburse passengers for their expenses resulting from having relied on the erroneous $40 fare.
"These could include fees for cancelling flights or cancelling hotels, rental cars or other ground arrangements, as well as additional costs incurred in rebooking flights due to fare increases on previously held flights that were cancelled in order to book the $40 fare," the statement said. British Airways has also apologised to its customers who booked the $40 tickets.
Source: Rediff Business
The airline had cancelled the bookings and offered all affected passengers a travel voucher of $300.
An official statement said British Airways, in an agreement with the US department of transportations aviation enforcement office will compensate consumers for cancellation penalties and other expenses incurred due to the carriers erroneous offer of $40 fare between the US and India.
"This agreement with British Airways will compensate passengers for losses they suffered as a result of the carriers mistaken fare offer," transportation secretary Ray LaHood said.
The lowest US-India fare being offered by British Airways prior to the mistaken ad, not including taxes, was over $750.
The $40 fare, which did not includes taxes and fees, was posted on British Airways own website at about 6.30 pm on October 2.
The carrier realised its error and removed the fare within minutes from its own website, but it remained on the websites of certain on-line travel agents for about two hours. During this time, more than 1,200 bookings were made covering approximately 2,200 passengers.
In consultation with the Aviation Enforcement Office, British Airways has now agreed to reimburse passengers for their expenses resulting from having relied on the erroneous $40 fare.
"These could include fees for cancelling flights or cancelling hotels, rental cars or other ground arrangements, as well as additional costs incurred in rebooking flights due to fare increases on previously held flights that were cancelled in order to book the $40 fare," the statement said. British Airways has also apologised to its customers who booked the $40 tickets.
Source: Rediff Business
Wednesday, December 2, 2009
Airlines are flying in a 'comfort zone'
After flying low in the initial months of this year, airlines are gradually gaining altitude as yield -- or net revenue per seat -- and demand situation improve.
This trend is reflected in the International Air Transport Association's (IATA) Airlines Financial Monitor for October-November published on Tuesday, which said in the third quarter -- July-September -- 75 major airlines turned a loss of $3.4 billion in the same quarter last year into a profit of $0.7 billion.
However, despite improved financial performance of some carriers over last year, the Geneva-based air transport body has maintained its earlier forecast for an industry of $11 billion this year.
The domestic airline industry is also upbeat about the improving market condition and expecting the next two quarters to be better than last year's.
Samyukth Sridharan, chief commercial officer (CCO) of SpiceJet Ltd, said going by the environment in the last four months, the industry was optimistic about coming months too.
"If you look at the past four months, demand is back and that there is no reason to think otherwise. "The past few months have been encouraging and we can be optimistic about the same (financial performance in the next two quarters)," he said.
M Thiagarajan, managing director of Paramount Airways, said most local carriers have performed better in the last two quarters of this year compared to the same quarters last years.And he believes they would be able maintain the good numbers in the coming two quarters too with prevailing favourable market conditions.
"All (local) Airlines are flying in the comfort zone. Last year during this time, jet fuel prices were around $140 per barrel, which was way above today's $80-85 per barrel. I don't think it will climb to last year's peak level. I expect the impact of the winter demand in the US and Europe on the aviation turbine fuel (ATF) prices to be counter balanced by the economic trouble in the Middle East," said the owner of Chennai-based all-business airline.
Thiagarajan feels a stronger rupee against US dollar is also beneficial for the airlines, whose 60% of the operational costs - lease rentals, salaries of expat pilots, aircraft maintenance, spare parts and others -- are denominated in the US currency.
But what will really push airlines into the profit zone, he said, would be the improving yields and passenger load factor (PLF), both of which were headed north.
"I see gradual improvement in yields. I would say fares are moving in the right direction and will slowly increase by 20-25% from the current levels in the coming few months. The industry needs to get to these levels of fares for sustainable profitability," he said.
Thiagarajan's airline and budget carrier IndiGo Airlines were the only domestic carriers which reported profits last fiscal. As per Centre for Asia Pacific Aviation, Indian airlines lost around Rs 9,000 crore ($2 billion) last year as demand slipped and oil prices soared in an industry plagued with overcapacity.
But last year's trend has completely reversed this year with not just the demand picking up but even the yields improving.A senior executive with low cost airline GoAir said that all travel segments - leisure and business - were doing well this year.
"This (jump in business and leisure travel), combined with higher fares promise to take us towards better financial numbers," he said.
An analyst with a local broking firm predicted that most airlines will see a surge in yields and PLF in the December quarter. Jitendra Bhargava, executive director of Air India, was less optimistic than his peers. "PLF has certainly improved but fares and yields are still low, making it very hard for us to make money," he said.
Source: Daily News & Analysis
This trend is reflected in the International Air Transport Association's (IATA) Airlines Financial Monitor for October-November published on Tuesday, which said in the third quarter -- July-September -- 75 major airlines turned a loss of $3.4 billion in the same quarter last year into a profit of $0.7 billion.
However, despite improved financial performance of some carriers over last year, the Geneva-based air transport body has maintained its earlier forecast for an industry of $11 billion this year.
The domestic airline industry is also upbeat about the improving market condition and expecting the next two quarters to be better than last year's.
Samyukth Sridharan, chief commercial officer (CCO) of SpiceJet Ltd, said going by the environment in the last four months, the industry was optimistic about coming months too.
"If you look at the past four months, demand is back and that there is no reason to think otherwise. "The past few months have been encouraging and we can be optimistic about the same (financial performance in the next two quarters)," he said.
M Thiagarajan, managing director of Paramount Airways, said most local carriers have performed better in the last two quarters of this year compared to the same quarters last years.And he believes they would be able maintain the good numbers in the coming two quarters too with prevailing favourable market conditions.
"All (local) Airlines are flying in the comfort zone. Last year during this time, jet fuel prices were around $140 per barrel, which was way above today's $80-85 per barrel. I don't think it will climb to last year's peak level. I expect the impact of the winter demand in the US and Europe on the aviation turbine fuel (ATF) prices to be counter balanced by the economic trouble in the Middle East," said the owner of Chennai-based all-business airline.
Thiagarajan feels a stronger rupee against US dollar is also beneficial for the airlines, whose 60% of the operational costs - lease rentals, salaries of expat pilots, aircraft maintenance, spare parts and others -- are denominated in the US currency.
But what will really push airlines into the profit zone, he said, would be the improving yields and passenger load factor (PLF), both of which were headed north.
"I see gradual improvement in yields. I would say fares are moving in the right direction and will slowly increase by 20-25% from the current levels in the coming few months. The industry needs to get to these levels of fares for sustainable profitability," he said.
Thiagarajan's airline and budget carrier IndiGo Airlines were the only domestic carriers which reported profits last fiscal. As per Centre for Asia Pacific Aviation, Indian airlines lost around Rs 9,000 crore ($2 billion) last year as demand slipped and oil prices soared in an industry plagued with overcapacity.
But last year's trend has completely reversed this year with not just the demand picking up but even the yields improving.A senior executive with low cost airline GoAir said that all travel segments - leisure and business - were doing well this year.
"This (jump in business and leisure travel), combined with higher fares promise to take us towards better financial numbers," he said.
An analyst with a local broking firm predicted that most airlines will see a surge in yields and PLF in the December quarter. Jitendra Bhargava, executive director of Air India, was less optimistic than his peers. "PLF has certainly improved but fares and yields are still low, making it very hard for us to make money," he said.
Source: Daily News & Analysis
Tuesday, December 1, 2009
Air travel rises, but freight demand falls
Passenger demand for air travel rose in October but freight demand continued to fall, especially in Europe, data showed on Monday, indicating the global economic recovery remains fragile. Data from the International Air Transport Association (IATA) showed passenger demand rose 0.5% on the same month a year before while freight demand fell 0.5% after a 5.4% drop in September.
“Cargo traffic is 14% above the December 2008 low point but remains 15% below the early 2008 peak,” IATA said. “European carriers saw the biggest weakness in demand with a fall of 11.3% compared to October 2008, relatively unchanged from the 13% drop in September,” it said.
Air freight, a key barometer of the strength of world trade, tends to pick up early in the economic recovery cycle when businesses start to replenish their inventories. Passenger demand was 6% better than the low point reached in March 2009, but remained 5% below the peak recorded in early 2008, IATA said.
“Stripping out seasonal fluctuations, passenger capacity has been essentially flat throughout 2009... Yields remain under severe pressure. Although there has been a modest rise in air fares since mid-year, it remains around 20 percent less expensive to fly in real terms today than it was a year ago.”
IATA represents 230 airlines including British Airways, Qantas, United Airlines, Cathay Pacific and Emirates. It forecasts the sector will lose $11 billion on a net basis this year and $4 billion in 2010.
“Cargo traffic is 14% above the December 2008 low point but remains 15% below the early 2008 peak,” IATA said. “European carriers saw the biggest weakness in demand with a fall of 11.3% compared to October 2008, relatively unchanged from the 13% drop in September,” it said.
Air freight, a key barometer of the strength of world trade, tends to pick up early in the economic recovery cycle when businesses start to replenish their inventories. Passenger demand was 6% better than the low point reached in March 2009, but remained 5% below the peak recorded in early 2008, IATA said.
“Stripping out seasonal fluctuations, passenger capacity has been essentially flat throughout 2009... Yields remain under severe pressure. Although there has been a modest rise in air fares since mid-year, it remains around 20 percent less expensive to fly in real terms today than it was a year ago.”
IATA represents 230 airlines including British Airways, Qantas, United Airlines, Cathay Pacific and Emirates. It forecasts the sector will lose $11 billion on a net basis this year and $4 billion in 2010.
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