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Ancillary revenues: GAO report and Subcommittee hearings promise more regulations

19-Jul-10: The much awaited GAO Report on ancillaries coincided with last week's House Transportation and Infrastructure Committee Aviation Subcommittee hearings. These were all about transparency, taxes along with populism, as it became open season on Spirit Airlines President and CEO Ben Baldanza, as Congress turned its attention on airline fees. The outcome is likely to be pressures - and most probably more regulations - to require greater transparency - and even, possibly, rolling back ancillary charges. There was also talk of (perhaps double) taxation of such charges. Regulations would also cover foreign airline disclosure, if the GAOs recommendations are accepted.

Qantas’ B787 orders juggled again as it prepares for domestic war. Jetstar to take 787-8s from 2012

14-Jul-10: Qantas, with 50 firm B787 orders and another 50 or so options/rights, is one of Boeing’s largest clients for the Dreamliner aircraft and gets second billing with the manufacturer after All Nippon Airways, the seed purchaser. The latest move, announced today, will now reverse the order in which Qantas’ LCC subsidiary Jetstar receives the aircraft. This implies an important reshaping of Qantas/Jetstar’s domestic and international strategy.

Second tier LCCs playing major role in reshaping European aviation (Part 1) This article is premium content

09-Jul-10: European LCCs, led by Ryanair, easyJet and Air Berlin, commanded 32% of intra-Europe capacity (seats) in 2009, representing spectacular growth from just 4.6% less than 10 years ago in 2001 and a 20.2% share in 2005. But the 'big three' are just part of the story. This special two-part CAPA report looks beyond the headline-grabbing 'big three' European LCCs to provide updates on more than 20 of Europe’s secondary LCCs. Part I reviews Air Southwest, Anadolujet, Atlasjet Airlines, Belle Air, Blue Express, Blue Air, bmibaby, CLICK4SKY, Flybe, Germanwings, Iceland Express and Jet2.com, while Part II (coming soon) will review the progress at Monarch, NIKI, Pegasus Airlines, SkyExpress, Smart Wings, Sun Express, Sverigeflyg, Thomson Airways, Transavia.com, TUIFly, Wind Jet and Wizz Air.

Share Market Performance

Southwest reports strong performance in 2Q2010; Lufthansa to maintain JetBlue stake

30-Jul-10: Southwest Airlines' shares remained unchanged yesterday, despite the carrier reporting a strong set of financial results for the three months to Jun-2010 (2Q2010).

Aeroflot increases stake in Saratov Airlines; Finnair expanding fleet; Lufthansa down

30-Jul-10: European airline shares continued to decline on Thursday (29-Jul-2010) as markets declined late in trading, as investors started profit taking on recent gains. Airline shares were also pushed lower by a 3.0% rise in oil prices, to USD78.36.

Rolls-Royce profit drops on forex loss – Suppliers Share Wrap

30-Jul-10: A GBP1 billion loss on the fair value of currency contracts has pushed Rolls-Royce to a loss in 1H2010, despite a fair operational performance in 1H2010. The company reported an operating profit of GBP594 million, but losses before tax of GBP475 million, as a result of GBP1,069 in non-cash market-to-market financing losses. Excluding the exchange rate movements, Rolls-Royce reported a underlying profit of GBP465 million in the first half.

Royal Jordanian reports 13.9% year-on-year rise in revenue; Lonrho to launch Angolan hub

30-Jul-10: Royal Jordanian's shares remained stable on Thursday (29-Jul-2010). On the same day, the carrier released its financial/traffic highlights for the 12 months ended Jun-2010 with a 13.9% year-on-year rise in revenue to USD441.8 million and a net loss of USD10.2 million, compared to a net profit of USD10.9 million in the previous corresponding period.

Industry misses revenue record in 2Q2010; Expressjet surges; Jazz Air and Air Canada down

30-Jul-10: With the mainline and low-cost carrier reporting season drawing to a close, AirlineFinancials.com Founder Bob Herbst said the nine largest carriers reported USD1.86 billion in net profits on USD31.7 billion in revenues, the second highest in history and just shy of 2008’s USD33.3 billion record. Second quarter profits also missed the decade high set in 2007 by only USD8 million.

Ferrovial and Abertis lose ground with financial reports

30-Jul-10: Shares in Ferrovial and Abertis, Spanish infrastructure players with airport interests, lost ground yesterday, upon the release of their financial reports for the six months ended 30-Jun-2010. Bolsa de Madrid’s Ibex 35 Index closed 0.15% higher yesterday.

Welcome to Centre for Asia Pacific Aviation (CAPA)

30-Jul-10 8:07 PM

CAPA is the leading global aviation knowledge practice, delivering market analysis and data to support strategic decision making at hundreds of the most recognised organisations in the industry. Established for 20 years, CAPA has developed an unrivalled reputation for independence, insight and integrity. Our extensive network of experts allows us to deliver research coverage across Asia Pacific, Europe, Middle East, Africa and the Americas on key trends and developments in aviation business, strategy, operations and policy. CAPA has led the way with flagship reports on issues such as low cost airlines, airport privatisation, training, ancillary revenues and the emerging markets of China, India and the Middle East. We look forward to continuing to help shape the direction of this fascinating and dynamic industry.

Southwest's record revenue performance yields USD112 million profit

30-Jul-10 5:26 PM

In a dramatic swing from 2Q2009, Southwest Airlines more than tripled its results of a year earlier, excluding special items, from USD59 million to USD216 million in 2Q2010. Southwest Chairman, President and CEO Gary Kelly announced the results to analysts during yesterday’s second-quarter earnings conference call.

India’s second tier airports: Will modernisation of 35 airports by AAI generate further growth?

30-Jul-10 4:52 PM
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Indian airline traffic growth remained above 20% in Jun-2010, the fourth consecutive month that domestic airlines have reported growth in this range. Traffic has been soaring at India’s second tier airports, the non-metros, where extensive modernisation and expansion projects are under way to cope with rising demand. The Indian Government previously identified 35 non-metro airports for upgrade and modernisation works, with initial plans to have all upgrades completed by 2009. Due to the slowdown in traffic related to the global economic recession and issues related to funding, completion was delayed. The revised target is to have the modernisation of all 35 airports completed by 2012.

US air fares still a bargain, despite increases. The 'lost decade' for US airlines

29-Jul-10 4:57 PM

The US airline industry immediately responded to the Department of Transportation report that air fares are rising, saying they should be kept in perspective. It was a clear attempt to derail any more criticism being heaped on the industry at a time when mergers and fees have become the focus of much Washington ire.

Aviation in Tibet flying high on resources and tourism boom

29-Jul-10 4:24 PM
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The Tibet Autonomous Region is one of the most exciting aviation markets on the planet. Over the past 10 years, the Central Government in Beijing has invested CNY310 billion (USD46 billion) in Tibet – equivalent to almost USD15,000 per person – building infrastructure and developing mining, agriculture and tourism industries. This is expected to continue, with China’s President Hu Jintao stating earlier this year that the government would seek to "fast-track" development in Tibet, to enhance security in the region, with plans to raise infrastructure quality and agricultural incomes to national levels by 2020.

Spring doubles revenue and profits in 1H2010; improved performance expected in second half

29-Jul-10 4:23 PM
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China's most successful LCC, Spring Airlines, reported a doubling in revenue and profits in 1H2010, which the carrier attributes to “significantly” lower costs than its competitors. The carrier reported revenues of USD215.2 million in the six-month period, a 60% year-on-year increase, while profits surged 288.6% year-on-year to USD23.4 million. The carrier is gearing up for an IPO next year.

SpiceJet Q1 profit more than doubles; expecting to take “disproportionate share” of growth

29-Jul-10 4:00 PM
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SpiceJet’s first quarter net profit more than doubled in the three months ended Jun-2010, surging 110% to USD11.8 million, driven by a 35% increase in operating revenues to USD152 million and a 29% increase in passenger numbers. The carrier’s net profit margin in the quarter of 7.8% represented the second highest level in the past two years and compared to a net profit margin of 5.0% in 1Q2010 and -28.3% in 1Q2009. It caps a stunning turnaround for the carrier following deep losses in 2008/09 and the first half of 2009/10.

World airline passenger and freight traffic back above pre-recession peak; some “slowing” expected

29-Jul-10 12:24 PM

IATA reported continued “strong demand growth” in international scheduled traffic in Jun-2010, as the industry recovers from the impact of the global financial crisis. IATA Director General, Giovanni Bisignani, commented that the industry “continues to recover faster than expected”.

NATS reports profit in a challenging year

28-Jul-10 4:43 PM
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NATS, the UK’s major air navigation service provider, has managed to emerge from FY/2010 with its run of black ink intact. For the year to 31-Mar-2010, the ANSP reported an underlying profit before tax of GBP100.7 million, GBP43.2 million that its result in the previous financial year. Pre-tax profit was GBP78.3 million, again down on last year’s result, this time due by GBP57.2 million.

Air Berlin joins oneworld – “the last member in Europe”

28-Jul-10 10:13 AM

In an announcement yesterday morning, American Airlines said Air Berlin would be joining oneworld, which includes comprehensive codesharing and frequent flyer partnerships. It fills in the final gap for the alliance in Europe with Air Berlin’s extensive network in Central Europe. The two expect to implement the codeshare at American’s hubs at New York, Miami and Los Angeles as soon as all government approvals are received.

Morphing global airline alliances: Is Air Berlin good for oneworld?

28-Jul-10 10:13 AM

"Aer Lingus announced in May its intention to leave oneworld as its strategy has changed fundamentally since it joined the alliance six years ago and is no longer convergent with oneworld's. The alliance's key target market is the multi-sector, premium, frequent international traveller, and Aer Lingus has repositioned itself as a low fares point-to-point carrier" - oneworld Press Release, 29 September 2006. - Ah, the good old days of 2006, when alliances were composed of mature legacy carriers that offered all the traditional benefits and perks. Aer Lingus, in its remake for survival, decided to try a different operating model and was, like an unruly country club member, asked to leave.

United Airlines and Continental shuffle executive ranks as EU approves merger

28-Jul-10 8:54 AM

The European Commission granted the United/Continental merger unconditional clearance and concluded the merger would not raise any specific concerns in Europe or the trans-Atlantic. The move came only minutes after the two airlines announced their executive suite which would not include either United President John Tague or CFO Kathryn Mickells.

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