Malaysia’s AirAsia has unveiled plans to launch a new domestic airline in India by the fourth quarter of 2013. Under the terms of a deal announced on February 21, the largest low-fare carrier in Asia will hold a 49-percent stake–the maximum holding permitted by the Indian government for a foreign investor–in the new airline. AirAsia is partnering with major Indian industrial groups Tata (to carry a 30-percent stake) and Telestra Tradeplace (21 percent).
Policy-making paralysis over much-needed reforms and liquidity concerns raised by the grounding of Kingfisher Airlines has deterred investors, vendors, lessors and suppliers from doing business in India’s air transport sector, according to delegates attending last month’s Asia-Pacific Airlines Association Assembly of Presidents in Kuala Lumpur. Association calculations show that average profits among Indian airlines amount to just $1 per passenger.
The European Commission’s August 29 decision to launch a full probe into Ryanair’s proposed takeover of Aer Lingus appears to mean that all bets are off in terms of the long-term ownership of the Irish flag carrier. Under stock market rules, Ryanair’s bid for a majority stake in Aer Lingus automatically expired with the move by regulators, who believe the resulting merger would prove anti-competitive.
Spanish and Irish authorities have asked Ryanair flight operations to explain why three of the airline’s Boeing 737s requested and received landing priority in July after running low on fuel approaching Valencia Airport in eastern Spain. The Ireland-based low-cost carrier says that thunderstorms forced all three aircraft to divert from Madrid and that each of them ran short of fuel after holding for more than an hour. Although no one was injured, Ryanair officials reported the incidents to Spanish and Irish aviation regulators, prompting the investigation.
Ancillary revenue collected by airlines for products and services ranging from checked bags and extra legroom to co-branded credit cards continues to grow in size and importance to the industry. Fifty world airlines that disclose proceeds from such activities reported $22 billion in ancillary revenue last year, marking a 66-percent increase over 2009 results, according to a new report.
The decline of India’s Kingfisher Airlines, whose fleet has shrunk to 18 aircraft from 66, hasn’t only served to push air fares upward due to declining capacity in a high-demand market. At the same time it has reduced business for suppliers and airline service providers, such as maintenance, repair and overhaul (MRO) groups.
Europe’s regional airlines continue to struggle against European Commission (EC) bureaucrats who do not appreciate their value or the problems poor legislation and punitive taxation cause, or that they enable European economic prosperity. This was the central message from the “Regions at Risk” conference held by the European Regions Airline Association (ERA) in Porto, Portugal on April 18 and 19.
South Africa’s low-cost carriers have fallen into disarray as rising fuel costs and overcapacity take their toll on a domestic industry now hit by a spate of airline management resignations. Rodney James stepped down as CEO of OneTime airline, along with executive director Michael Kaminski, the company said March 13, without giving reasons for the departures.
In a reversal from an earlier policy, which gave state-owned Air India preference over bilateral aviation agreements for international routes, the Indian government will now open access to private airlines.
Singapore Airlines’ latest low-cost venture–Scoot–is evaluating Boeing 787s and Airbus A350XWBs as it plans to more than triple its fleet to 14 aircraft by 2015. The medium- to long-haul carrier will launch services in June with four Boeing 777-200s acquired from its parent, SIA.