Airasia X records first 2Q profit since inception
AirAsia X Berhad (AAX) has reported its financial results for the second quarter of 2016 (2Q16), including a revenue of RM883.2 million, a 35% increase year-over-year, marking the first time the carrier has achieved a profit during its second quarter operations.
2Q16 has seen AAX post an operating profit of RM20 million, while net profit after tax for the quarter stands at RM1 million, as compared to a loss of RM132.9 million for the same period the previous year.
The airline attributes this to a strong load factor of 75%, up seven percentage points year-over-year, despite the fact AAX increased available seat kilometres by 17% to 6,682 million from 5,693 million in 2Q15 by increasing the frequency on popular routes.
During the quarter under review, revenue per available seat kilometre also grew by 15% to 13.24 sen from 11.51 sen in 2Q15, while the average base fare saw a significant growth of 34% to RM526.
Furthermore, cost per available seat kilometre decreased 2% year-over-year to 13.20 sen due to lower fuel prices. However, this was slightly offset by five additional A330 operating lease aircraft with higher
rental rates in comparison with 2Q15.
rental rates in comparison with 2Q15.
AirAsia X Group’s CEO, Datuk Kamarudin Meranun, stated, “While the second quarter has historically been a lean quarter for us, we have managed to overcome all odds and record our first second quarter profit since inception.
“We continue to see improvement across all segments. In 2Q16, Australia contributed the highest growth to Malaysia AirAsia X operations. Revenue from Australia increased 56% year-over-year on the back of higher passenger traffic, while the average base fare rose by 15%. Revenue from China also grew 47% year-over-year, while load factor improved 11 percentage points to 82% and the average base fare rose by 53%.
“We believe this trend will remain for the rest of the year as a result of the Malaysian Government initiative on visa waiver for Chinese travelling to Malaysia coupled with an increase in Fly-Thru traffic to our core markets with improved timing. The future for AAX Group will see us expanding to China and other core markets, in line with our strategy to build market dominance within the region.
“We took delivery of two aircraft, both under operating lease for our Malaysian operation, to cater for our expanding network, bringing our total fleet to 30 as of August 2016. There will be no more deliveries until 2018.”
“Thailand AirAsia X recorded a strong 89% load factor, an increase of 17 percentage points year-over-year from 72%. This was boosted by an 8% increase in the number of international tourists to Thailand in 2Q16. Revenue was up 17% year-over-year and passengers carried rose by 35%, exceeding the airline’s capacity growth of 3%. This was despite the ICAO downgrade in December which prompted Japan and South Korea to put a freeze on additional flights by Thai-registered airlines.”
“Indonesia AirAsia X (IAAX) posted a net loss of USD8.9 million in 2Q16 from USD8.2 million in the same period last year. As Indonesia’s operational environment remains challenging, we will temporarily cease IAAX’s Australian routes in September with the aim of restarting service next year."
Benyamin Ismail, CEO of Malaysia AirAsia, added, “We have benefited from the low-fuel environment and hedged all our remaining requirements for this year based on planned existing routes, which has certainly allowed us to better manage cost while exploring new strategic routes. As a result, we trimmed CASK by 2%, however, the weakening of the ringgit prevented further cost reductions as most of our costs are denominated in USD.
“Revenue improved 35% year-over-year to RM883.2 million for the second quarter, as scheduled flights revenue surged by 71%. The healthy demand for our award-winning Premium Flatbed product pushed up premium cabin load factor to 69% while revenue soared to RM42 million, an increase of 50% year-over-year. Ancillary revenue increased by 31% to RM136.9 million, and we foresee this number growing even further with the launch new ancillary products such as our exclusive Premium Lounge opening in September 2016, in-flight entertainment on flights to all markets – not just Australia – and the availability of new insurance products that protect both our guests and their gadgets while travelling abroad.”
Rex releases FY15/16 financial results
The Regional Express (Rex) Group has announced a statutory loss after tax of AUS$9.6 million for the full financial year of 2016 (FY15/16) following a $15M impairment of goodwill and assets.
The company’s goodwill impairment amounted to $6.6 million, while its asset impairment for FY 15/16 stood at $8.4 million, creating a tax impact of $2.5 million.
Rex reported an operating profit before tax of $4.3 million in comparison to $9.3 million the previous year, with operating profit after tax decreasing to $3 million, down from $6.7 million year-over-year. The $4.3 million operating profit before tax was achieved on a turnover of $261.9M.
In comparison, Rex declared a profit after tax of $6.7 for the full financial year of 2015. The airline’s COO, Neville Howell, commented, “The Group had to make some non-cash write-downs due to the cessation of a defence contract which resulted in the first full-year statutory loss Rex has reported since FY02/03.
“The new Western Australian routes which began on 28 February 2016 are expected to contribute 9% of Rex’s total passengers in FY17. This together with the reduced fuel costs from hedging initiatives should see Rex post better results in FY17,” Howell concluded.
Honeywell receives final certification for JetWave hardware
Honeywell has achieved final certification from Inmarsat for its JetWave hardware that will allow people to connect to GX Aviation, Inmarsat’s new in-flight connectivity service.
The certification centres on JetWave’s operation in all environmental conditions with Inmarsat’s Global Xpress (GX) satellite network, which comprises three satellites already launched and functioning.
“Inmarsat’s certification of our JetWave hardware means that customers don’t have to wait for a high-speed, global connectivity service. It’s available and ready for installation now,” declared Carl Esposito, VP marketing and product management, Honeywell Aerospace. “A recent Honeywell survey found that 84% of travellers say it is important to have an in-flight Wi-Fi experience identical to what they have at home or in the office, and airlines around the world will now be able to meet their customers’ demands with GX Aviation.”
Leo Mondale, Inmarsat Aviation’s president, averred, “GX Aviation is the ultimate broadband solution for the skies. It is a truly global service that has been engineered with aircraft mobility in mind, ensuring that airlines, business aviation operators and leading aircraft companies can offer high-quality connectivity even at 40,000 feet, using a single network from a single provider.
“We are delighted with the performance of Honeywell’s JetWave terminals, which have been designed for ease of installation and maintenance to ensure the lowest downtime for any cabin connectivity solution in the market,” Mondale continued. “This final certification is an essential part in opening the doors to this exciting new era of in-flight broadband, available to our customers anytime and anywhere, with absolutely no limits in terms of deployment to their fleets.”
JetWave has also been certified by the FAA and EASA regarding environmental and installation standards.
Third-party routers enabled on Gogo Biz Network
Gogo Business Aviation has embarked on an initiative to enable operators, dealers and installers to equip their aircraft with approved routers from third-party manufacturers on the Gogo Biz network.
“Gogo is at the forefront of the aircraft connectivity space, and with many aircraft-approved routers now available in the marketplace, we have created a process to offer our customers additional options – giving them the power to select a router that meets their specific needs,” explained Sergio Aguirre, SVP product management and business development, Gogo. “By opening the router to other providers, we've streamlined the ability for our customers to leverage Gogo's world-class network and interoperate with our solutions for the best possible experience.”
Moving forward, Gogo Biz customers will be allowed to select a router from a list of authorised providers. To ensure the highest-quality user experience, Gogo says providers will be fully evaluated and type-certified on its system.
Royal Jordanian partners with DFASS Group
Under an agreement with DFASS Group, Royal Jordanian has launched a new duty-free sales service in-flight, which is available to passengers flying on medium- and long-haul routes.
The DFASS Group is formulating a unique duty-free programme appealing to the needs of Royal Jordanian's passengers, including the sale of airline-branded items, which they can pay for in cash – Jordanian dinars, euros, US dollars or the British pound – or by credit card.
President and CEO of Royal Jordanian, Suleiman Obeidat, commented, “Royal Jordanian’s objective to sell duty-free goods on board is an added value to the customer service it offers its passengers. This time-saving shopping experience will enable our passengers to buy what they need during their journey time.”
Obeidat hopes duty-free sales in-flight will support Royal Jordanian with ancillary revenues.
Mario Mouarbes, VP Operations-EMEA, DFASS, remarked, “DFASS is excited to commence operations in Jordan, and will leverage its global reach to ensure that Royal Jordanian is bringing first-class services to its passengers through state-of-the-art systems.”
China Eastern receives paperless status with Jeppesen
China Eastern Airlines has become the first carrier in the country to achieve paperless operating status utilising Jeppesen’s FliteDeck Pro as part of its electronic flight bag (EFB) solution.
“Using Jeppesen FliteDeck Pro for charting and navigation with our international operations and our domestic NAIP charting data for flights within China provides the foundation for gaining this landmark clearance from the Civil Aviation Administration of China,” explained Hou Jianjun, managing director of China Eastern Airlines AOC. “We are proud to be the first airline in China to fly in a fully digital capacity and our partnership with Jeppesen made this vision a reality.”
Jeppesen FliteDeck Pro helps airlines streamline the delivery of flight information, including worldwide navigation charts, which is delivered to Jeppesen FliteDeck Pro through the JDM Pro enterprise solution.
“Teaming with China Eastern to achieve paperless operations takes into account the innovative technical advances with EFB and navigation services established by both companies to make this possible,” added Gardiner Porter, Jeppesen’s managing director and general manager for the Asia-Pacific. “Working closely together, we were able to understand the challenges that we faced and developed solutions to implement fully digital flightdeck capabilities to serve China Eastern’s domestic and global operations.”
In addition to Jeppesen FliteDeck Pro, China Eastern also uses other digital Jeppesen services to increase operational efficiency including OpsData and NavData.
IFPL delivers two-millionth industry part
IFPL has supplied its two-millionth industry part, its Noise Cancelling Audio Jack (p/n 1155), to a key OEM during its 20th year of trading.
The company reached this milestone just four years after the first million, demonstrating its continued sustainable growth in in-flight entertainment and connectivity peripherals.
Tim Young, chief operating officer of IFPL, commented, “It is a testament to the whole IFPL team, that the two-millionth part followed so soon after reaching our first million. IFPL investments in quality systems, manufacturing and product development capability combined with the development and introduction of new NFC, USB, audio jacks and passenger control units, means that we aim to reach our three-millionth unit even sooner.”
Pictured: Tim Young accepts the two-millionth unit from IFPL’s head of production, Marcus Baker.
JAL extends free 15 mins of IFC to 2017
All customers flying on domestic routes with Japan Airlines (JAL) can now access 15 minutes of in-flight connectivity (IFC) for free until 31 March 2017.
Currently, JAL is flying 69 domestic aircraft equipped with in-flight Wi-Fi, but expects all 77 of its domestic aircraft will be equipped with IFC by March 2017. The promotion will not be available on international aircraft equipped with in-flight Wi-Fi, even if they are operating on domestic routes.
Free in-flight entertainment can also be streamed to passengers’ personal electronic devices on JAL’s Wi-Fi-equipped aircraft.
Aviation PLC delivers third A321-200 to Vietjet
Aviation PLC has successfully completed the purchase and delivery of the third new Airbus A321-200 aircraft to Vietjet straight from the OEM’s production facility in Hamburg, Germany.
The new aircraft is equipped with CFM56-5B3/3 engines and with 230 seats offers the highest possible capacity for the type.
Southwest to fly nonstop between LAX and three Mexican airports
From 4 December 2016, Southwest Airlines will begin international service between Los Angeles International Airport (LAX) and three Mexican destinations: Cancun (CUN), San Jose del Cabo/Los Cabos (SJD), and Puerto Vallarta (PVR).
The services from LAX to both CUN and SJD will take place twice daily, while the LAX–PVR flights will operate once daily.
“Southwest's approval from the US Department of Transportation to operate these new routes made history as the first authorities granted in a new agreement between the US and Mexico to allow more service between the countries,” averred Paul Cullen, VP and executive sponsor of Los Angeles for Southwest Airlines. “We are able to do what we have done for decades in California and in cities across the country: enter a non-stop market, bring low fares with unmatched value, and connect people in a more affordable way with places that are important in their lives.”
In July 2016, Southwest received approval from the DoT to fly between Oakland International Airport and both Los Cabos and Puerto Vallarta. Subject to Mexican governmental approval, the new service is set to begin on 12 February 2017.
Tigerair Australia to launch daily Melbourne–Canberra flights
Tigerair Australia is to begin a daily return service between Melbourne and Canberra, adding over 2500 seats through each airport every week.
The carrier’s CEO, Rob Sharp (pictured), commented, “We have witnessed overwhelming demand and are proud to provide the only low cost services between Canberra and Melbourne. We are confident the new route will prove popular for our core market of budget and leisure travellers. In further good news for consumers, we are bringing a new-look Tigerair to Canberra.
“Our customers love low fares but they also want friendly service and on-time flights,” Sharp continued. “Tigerair Australia was rebranded in July 2013 and I’m thrilled to say that we are delivering on the promise of consistent delivery of affordable, reliable air travel with great customer service.”
Chief Minister of the Australian Capital Territory (ACT), Andrew Barr, stated, “These flights will generate AUS$17 million a year in the Gross Regional Product of the Canberra catchment and, importantly, create an additional 124 jobs. This is such an exciting time for aviation in Canberra. International flights will start for the first time next month and we can now add this low-cost link to Melbourne that Canberrans have been crying out for.”
Airlink increases frequency on Johannesburg–Bulawayo service
Having received its 19th ERJ 135 aircraft, Airlink is able to introduce an additional flight on its Johannesburg–Bulawayo route which will begin on 5 September 2016.
The morning flight on the 37-seat regional jet is targeted at business travellers residing in Johannesburg. It will depart OR Tambo International Airport at 06:25 every day between Monday and Friday to reach Bulawayo at 07:45. The return flight will take off from Bulawayo at 08:05 to arrive back in Johannesburg at 09:30.
“Not only does the new morning flight provide additional flexibility when planning traveller itineraries, it will also provide additional capacity on the route,” explained Karin Murray, Airlink’s sales and marketing manager.
Murray also said Airlink will add capacity on the route over the Christmas season with an extra afternoon flight which will operate between 12 December 2016 and 15 January 2017. The seasonal afternoon service will depart OR Tambo at 15:00 to arrive in Bulawayo at 16:20 before the return leg departs Bulawayo at 16:40 to reach OR Tambo at 18:05.
Wizz Air opens seventh Romania base
Sibiu has become Wizz Air’s seventh Romanian base which, as a result, now operates four new routes to Nuremberg, Madrid, Milan Bergamo and Munich Memmingen.
The thrice-weekly Sibiu–Nuremburg flights began on 19 August and will take place on Mondays, Wednesdays and Fridays. Twice-weekly services to Milan Bergamo and Madrid began on 20 August and will both operate on Tuesdays and Saturdays. The twice-weekly Sibiu–Munich Memmingen route, which started on 21 August, will take place on Thursdays and Sundays.
Operated using Airbus A320 aircraft, the new services bring the number of routes from Sibiu International Airport to six and represent a further €98 million investment by Wizz Air in Romania.
Wizz Air currently offers 119 routes to 18 countries from nine Romanian airports and plans to grow its fleet in the country to 20 aircraft by the end of 2016, including four new 230-seat Airbus A321s.
József Ujhelyi, Wizz Air’s chief flight operations office, stated, “We are thrilled to be celebrating the opening of our seventh Romanian base in Sibiu. Since our first service from Bucharest in 2007, Wizz Air has been dedicated to democratising air travel in Romania, by bringing Romanian customers low fares paired with excellent onboard experience.
“Today’s milestone once again underlines our commitment to Romania and, as Romania’s largest airline, we will contribute to developing the local infrastructure and supporting the economy of the Transylvanian region,” Ujhelyi concluded.
On 19 August, Wizz Air also began operating a four-times route between Suceava and London Luton which will run on Mondays, Wednesdays, Fridays and Sundays.
flydubai enters PBH contract with AAR
In a new long-term agreement, flydubai has selected AAR to provide its power-by-the-hour (PBH) component inventory management and repair services.
AAR will assume nose-to-tail management of components and repairs for flydubai's Next-Generation Boeing 737-800 fleet, starting with 53 aircraft and increasing to 60.
Mick Hills, SVP Engineering and maintenance at flydubai, commented, “We continue to invest in technologies and partnerships that strengthen our commitment to maintain the highest levels of reliability and safety in our operations. We are excited about our component inventory management and repair services agreement with AAR, which will help us reduce aircraft-on-ground time and consequently contribute to our on-time performance.”
“As flydubai continues on its robust growth trajectory, it must optimize its fleet's performance while minimising costs and aircraft-on-ground time,” remarked Deepak Sharma, president of AAR’s international supply chain. “Given AAR's experience helping airlines increase operational efficiencies, flydubai decided we are the right partner for the crucial behind-the-scenes work.”
The contract marks a big expansion of AAR’s footprint in the Middle East.
Ryanair has big plans for Italy
In response to a decision by Italy’s government to reverse its €2.50 municipal tax increase from 1 September 2016, Ryanair has said it will drastically accelerate growth plans in the country during 2017.
Ryanair’s plans were also spurred on by revised airport guidelines which will enable Italy’s regional airports to compete on a level playing field with airports in Rome and Milan, as long as they comply with EU rules.
These initiatives have allowed Pescara airport to reach a new growth agreement with Ryanair, which will reverse the previously announced closure of the airline’s Pescara base in November.
In 2017, Ryanair plans to allocate 10 new aircraft to the Italian market, an investment it estimates is worth over US$1 billion. The aircraft will help to enable 44 new routes to begin during 2017 – 21 at Rome & Milan airports and 23 at Italy’s regional airports – meaning 3 million new passengers per year (a 10% growth across the country).
Some of Ryanair’s new 2017 routes from Italy will include Pescara–Copenhagen, Pescara–Krakow, Rome–Lourdes, Rome–Nuremberg, Bologna–Lisbon, Bologna–Eindhoven, Bergamo–Edinburgh, Bergamo–Luxembourg and Bergamo–Vigo.
The carrier predicts that overall, 35 million customers will fly to and from Italian airports with Ryanair in 2017, which will see the airline create an additional 2,250 jobs at Italy’s airports.
Michael O’Leary, Ryanair’s CEO, stated, “We are extremely grateful to Prime Minister Renzi and Transport Minister Delrio for taking these initiatives to grow Italian tourism. All of this growth would have been lost to other EU countries if the Municipal Tax increase had not been reversed, and the airport guidelines had not been redrafted to comply with EU rules.”
O’Leary confirmed Ryanair is in negotiations with Alghero airport and hopes to conclude a similar agreement to its deal with Pescara once the airport concludes its current privatisation project in early September. O’Leary said its Alghero base could reopen as soon as late November.
“The Italian Government keeps on working on the compliance with the EU rules, we are committed to develop services to citizens and to foster opportunities for investors,” declared Italy’s Minister for Infrastructure and Transport, Graziano Delrio. “We welcome the 2017 industrial plan of Ryanair setting up more flights, increasing opportunities for tourism in Italy and especially new job opportunities.”
Vito Riggio, president of the Italian Civil Aviation Authority (ENAC), remarked, “The development of air transport represents a primary objective for the economic growth in our country. The times we are living in require a European perspective rather than a national one, especially for air transport and its regulations, always respecting fair competitiveness and passengers’ rights. The development plans of Ryanair and any other air carrier operating in Italy always represent to ENAC a significant opportunity to grow and further efforts to guarantee safety and high standards of quality.”
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