NEW
DELHI, NOV 11: AIR Arabia, the low-cost carrier (LCC) in the Middle East and
North Africa, has released its financial results for the third quarter of 2008.
The company's net profit for the three months ending September 30, 2008, stood
at AED 214 million, an increase of 30 per cent as compared to AED 165 million
during the third quarter of 2007.
For
the third quarter of 2008, the company posted a turnover of AED 625 million, up
69 per cent compared to AED 369 million during the third quarter of last year.
During the third quarter of 2008, the airline served 978,794 passengers, an increase
of 34 per cent compared to 729,745 passengers during the same period in 2007.
For the third quarter, Air Arabia's average seat load factor - or passengers carried
as a percentage of available seats - remained at an extremely impressive 87 per
cent.
Adel
Ali, Board Member and Chief Executive Officer of Air Arabia,
said, "Air Arabia is extremely proud to announce such positive results, which
demonstrate our ability to deliver sustained growth and excellent returns to our
investors. These results are also a clear indication that our passengers have
confidence in our efforts and continue to benefit from our industry-leading low
fares."
"This
quarter has been busy and special with its conclusion came the start of our five-year
anniversary celebratory month. As we look ahead toward the next five years, we
intend to continue in the same vein - to grow our fleet of aircraft, expand our
network of destinations and continue to offer the very best value-for-money service
throughout the regions we serve and beyond" Ali added.
The
positive financial results for Air Arabia in the third quarter of 2008 reflect
a continued upward trend for the carrier. For the first nine months of 2008, the
company posted a net profit of AED 374 million, up 34 per cent compared to AED
280 million during the same period last year. For the same period, the company
posted
a turnover of AED 1,495 million, up 68 per cent compared to AED 889 million in
the first nine months of 2007. In the first nine months of 2008, the airline served
a total of 2,601,967 passengers, an increase of 33 per cent compared to 1,954,982
passengers during the first nine months in 2007.
Both
the carrier's growth and its special consideration to passenger satisfaction have
been recognised by numerous prestigious awards. In the last quarter Air Arabia
secured the "Best Low-Cost Airline Award - Middle East and Africa" at
the World Low-Cost Airline Awards held in London and at the same event Adel Ali
was named the world's low-cost carrier "CEO of the Year."
October
28, 2008, marked Air Arabia's five-year anniversary. The airline celebrated this
milestone by covering the cost of all Air Arabia passengers' flights for this
day - a total of 12,500 free seats were made available. (editor@thesyerngyonline.com)
MUMBAI,
NOV 02 : THE aviation industry is going through a challenging phase globally,
driven primarily by spiraling fuel costs, which hit an un-precedented US$ 147
per barrel in July 2008. The Indian industry was hit more adversely due to the
cumulative impact of customs duty and sales tax on account of this sharp increase
in international fuel prices. The average price of ATF in the six month period
from April to September 2008 increased by about 60 per cent. The impact on Kingfisher
Airlines alone was to the tune of Rs.640 crore.
The
industry was constrained to pass on at least a part of this cost push in the form
of fuel surcharge resulting in an average 55 per cent increase in the end price
paid by the travelling public.
This
increase in fares coupled with the lean season between June and September resulted
in a drop in traffic and corresponding low capacity utilization for the industry
as a whole. The period saw Kingfisher's seat factor dropping in line with the
industry by about 6 per cent.
Apart
from the increase in the average ticket value, the company has initiated a number
of steps to mitigate and manage costs.
The
airline's key measures include network alignment consequent to the merger of Kingfisher
and Deccan ; the capacity deployed has been brought down by about 4 per cent and
further reductions are planned.
Two aircrafts have already been returned to Lessors with no additional cost, and
the Company is in discussion for the return of a further eight aircraft. The impact
of this capacity contraction will be visible during the second half of the financial
year.
The company has deferred its international rollout plans apart from one flight
operating between Bangalore and London. Consequent, to this decision taken in
the light of the global economic environment and the near recession conditions
prevalent in much of the Western world, there will be reduced deployment of wide-body
aircraft in the near term.
The merger of the two operating airlines into one corporate entity has also enabled
savings on operating costs such as Engineering and ground handling, insurance
and catering. Employee costs have also been addressed through an integrated organization
which enabled the Company to terminate the contracts of most expatriate staff
and impose a hiring freeze on new appointments.
Despite
the challenging environment, the company has managed to significantly improve
its topline performance.The
unit revenues have increased by over 33 per cent between the first half of FY09
and first half FY08. The
average ticket value has improved by 55 per cent over the same period. The
absolute revenues have increased by 33% despite a capacity reduction of 4 per
cent.
The
recent discussion between Kingfisher Airlines and Jet Airways is expected to help
both carriers to significantly rationalize and reduce costs by offering a unique
high product quality with improved standards of service to its consumers.
The
two airlines will be able to derive maximum synergies by working together and
thereby offer best possible fares for the benefit of the end users i.e., the travelling
customer.
The
scope of this discussion is expected to include joint fuel management to reduce
fuel expenses, common ground handling of the highest quality ,common global distribution
system platform, cross utilization of crew on similar aircraft types and commonality
of training as also of the technical resources, subject to DGCA approval on the
operational and cost aspect.
Areas
covered on the revenues and revenue related operational aspects are: Code-shares
on both domestic and international flights subject to DGCA approval; Interline/Special
Prorate agreements to leverage the joint network deploying 189 aircraft offering
927 domestic and 82 International flights daily ; Joint Network rationalization
and synergies ; Cross selling of flight inventories ; Reciprocity in Jet Privilege
and King Club frequent flier programs ; the softening of the fuel prices has resulted
in an improvement in the company's performance in September 2008 (fuel prices
reduced by 15.5 per cent). The further expected drop in fuel prices will help
the company in the second half of the year. (editor@thesyerngyonline.com)
NEW
DELHI, OCTOBER 16 : "THE current situation for airlines in India is clearly
not sustainable and it calls for an urgent need to relook at policy that deals
with the high cost structure most of which have to do with government taxes, direct
and indirect levies. congested airspaces and lack of secondary airports as competition,"
Mr. R. Chandrasekhar, MP and FICCI president, said while speaking at the Aviation
Conference in Hyderabad that is being attended by ministers and the top guns in
the aviation sector. The meet started yesterday and will end on Friday.
Mr.
Chandrasekhar said that while the government delivered on its policy of creating
competition and consumer benefit, the rapid growth in the sector had shown up
cracks in the policy that needed attention. Some of them are addressing the sustainability
challenges of the Airline sector which is primarily the cost structure issues,
address the competition and availability issues within the infrastructure sector
and develop a strategy and blueprint for the aviation in terms of manufacturing
and services sectors.
Mr.
Chandrasekhar said that while taxpayer money cannot be used to bail out the airline
sector, what could be done was to redesign the cost structure to make it sustainable
and emerge as a growth model. Secondly, public policy in the infrastructure space
needed re-examining. The conventional wisdom earlier was that big investments
for airports were difficult to mobilize and that is why monopolies existed. This
was no more the case and so it's time to re-examine the model of the Airport monopolies
in all our cities including the monopolies in Bengaluru, Hyderabad, Delhi and
Mumbai, he said.
The
FICCI chief said that it would be a good idea to have two or three airports in
a large city instead of one as otherwise it might lead to situations like the
one in Bangalore the private investment cost of the airport was only Rs. 800 Crore
but state investments to connect to the airport would exceed Rs 6000 crore.
Mr.
Chandrasekhar said that if India could fix these growth related aberrations, the
sector could get back to the business of growing. But it needed a blueprint to
tap exciting opportunities. FICCI was ready to partner with the Aviation Ministry
to develop it, he said.
Mr.
Chandrasekhar said that progressive and aggressive states like Andhra Pradesh
must seize these opportunities as all one needed was to simply look at examples
of the Telecom sector where a thriving manufacturing sector has developed on the
back of the services business as part of a concerted strategy. Another reference
point for aviation manufacturing is the thriving Automobile Engineered Components
Industry, he said.
Mr.
Chandrasekhar said that while there was an atmosphere of doom and gloom around
the world with the current financial crisis, it was actually the time for India
to talk of growth. While most of the world was busy clearing up its financial
mess, India should concentrate on taking steady steps consolidating its growth
and building a plan for its next phase of growth and leadership.
He
pointed out that in the last four years, the aviation sector had been transformed
from a sluggish capacity constrained sector to a competitive one resulting in
a world class product resulting in an elitist form of travel becoming so affordable
to consumers.
The
demand fundamentals for the industry from a forward looking perspective remain
compelling and strong and critically have the potential of developing a number
of other opportunities around this, including Air Cargo, Terminals, Manufacturing,
Technology services and Knowledge industries, he added. (editor@thesyerngyonline.com)
NEW
DELHI, SEPTEMBER 26 : THE growing air travel in India will drive airport retailing
so much that by 2015, over 50 per cent of revenues of Airport Authority of India
(AAI) is expected to come from non-aeronautical activities, of which airport retail
would comprise 27% of the revenues, says a joint study of ASSOCHAM and KPMG.
The
non-aeronautical retail activities in airport retailing would grow to an extent
that other revenues sources for AAI would come from hospitality (1per cent),
office (17 per cent), trading concessions (9 per cent), public admission fees
(1per cent) and miscellaneous (45 per cent), adds the study on Airport Retailing
: Need for Innovative Business Model’.
Releasing
the Study, the ASSOCHAM President, Mr. Sajjan Jindal said that air travelers no
longer perceive airports to be waiting lounges between one city and the next.
Today this perception has given way to one in which the travelers expects much
more out of an airport in terms of facilities offered, quality of service and
support infrastructure.
“The
travelers have enough time at airports and they would like to spend their leisure
time in retail and discount stores and even luxury hotels within the airport premises.
It is in view of this that the airport retail would grow phenomenally”, said
Mr. Jindal.
According
to the study, this trend is already visible with the coming up of Bangalore International
Airport, where more than 40,000 sq ft of retail space is planned in the first
phase with complete focus on real estate development, including 5 star hotel (Trident
Hilton), office space, business center & technology park. The Bangalore
airport has set a benchmark for real estate development in airports. As more green-field
projects are developed we will see airports with development of both, landside
and airside. While airside will see the development of limited retail offers
into shopping malls built around passenger terminals, landside developments will
include additional retail centers, hotels, office blocks, exhibition malls,
leisure facilities and various trading and distribution centers as well as land-based
transport links to nearby cities.
The
study points out that till recently ITDC has had a virtual monopoly in the airport
duty-free shops. However with the airport privatization and coming in of new managements
focusing on boosting revenues this trend is fast changing. Airport managements
are looking at retail players who have the international experience of airport
retailing as well as an understanding of the Indian consumer dynamics. Such a
scenario has paved way for Joint ventures where foreign players have tied up with
Indian retail giants to bid jointly. As more airports move towards privatization,
this trend is likely to continue with the traditional duty-free store being replaced
by a wide selection of outlets looking to capture the duty free retailing which
is still regarded as a virgin market.
The ASSOCHAM holds that traditionally,
the airport has served as a transition space between ground and air transportation,
with the stereotypical objective being to make the transition as expedient
as possible. Today, however, airports all over the world are turning these spaces
into revenue-generating, exciting environments.
The
global scenario for airport retailing indicates that the segment truly has the
potential to become a major revenue generator for retailers. For instance,
the top most travel retail & duty free location is at the Heathrow Airport
which has a retail turnover approaching that of Bluewater, arguably one of
Europe's most premier shopping mall. (refer to adjoining table).
Airport
retailing, globally a USD 34 billion revenue generator, has the potential to build
an entirely new retail channel in India. We look to identify certain key drivers
that would transform the airport climate for retailers in India.
While
modernization of brown-field projects like Delhi & Mumbai will provide an
opportunity for setting retail stores, the real driver for the segment would
be green field projects like Bangalore & Hyderabad. These new airports, built
on world class standards, and to be located across 8 metro and 35 non-metro
destinations in the country would soon be leveraging their huge swathes of renovated
interiors and modern designs to bring into India a new channel of non-aeronautical
revenue consisting of retailers, hoteliers, restaurants and duty free outlets.
Growth
in air travel will be the driving force behind airport retail. As indicated in
the graph, Airports Authority of India is projecting an annual growth of 21.6%
in international passenger traffic in India. Globally, there is a clear correlation
between passenger throughput and the volume of retail sales & the ASSOCHAM
expects as similar trend to happen in India. (npsinha@thesyerngyonline.com)
NEW
DELHI, OCTOBER 16 : "THE current situation for airlines in India is clearly
not sustainable and it calls for an urgent need to relook at policy that deals
with the high cost structure most of which have to do with government taxes, direct
and indirect levies. congested airspaces and lack of secondary airports as competition,"
Mr. R. Chandrasekhar, MP and FICCI president, said while speaking at the Aviation
Conference in Hyderabad that is being attended by ministers and the top guns in
the aviation sector. The meet started yesterday and will end on Friday.