Troubles in Australia and the airline order action at the Singapore Airshow dominated news headlines from the Asia Pacific in February.
On 27 February Qantas released its results for the first half of its 2014 financial year ended 31 December. The market had expected bad news, and Qantas did not disappoint, posting a first half net loss of A$252 million ($224 million) and slashing 5,000 jobs. The carrier will also retire and defer deliveries of 50 aircraft, including Boeing 787-8s due for Jetstar and its final eight Airbus A380s.
Virgin Australia also had a bad six months, losing A$49.1 million, showing the damage inflicted by its market share war with Qantas. Air New Zealand, however, saw its first half net profit jump 40% to NZ$140 million ($117 million).
Earlier in the month, the industry’s attention focused on the biennial Singapore air show from 11-16 February. The big surprise of the show was Indian low-cost carrier Air Costa’s firm order for 50 Embraer E-Jet E2 aircraft, with purchase rights for 50 additional aircraft, the biggest vote of confidence to date in the prospects for regional aircraft in India.
Vietnamese low-cost carrier VietJet Air also used the show to firm up previously announced orders for 63 A320s and purchase rights for 30 more – the carrier will also take seven aircraft through lessors. It also placed an $800 million order for CFM International CFM56-5B engines to power 21 of its A320s.
The star of the Singapore show, however, was the Airbus A350-900, which made its first full airshow debut. It performed in the flying display and also appeared in the static park. Airbus’s decision to send the A350-900 to Singapore was no doubt influenced by Singapore Airlines’ orders for 70 examples of the type.
The month also saw signs emerged that perhaps not all is well in Southeast Asia’s low-cost sector, with AirAsia reporting that its full year net profit in 2013 plunged 54% to M$364 million ($111 million). Tucked away deep in AirAsia’s earnings statement was its plan to defer delivery of 19 incoming A320 aircraft, a bid to moderate capacity growth.
South Korea’s Asiana Airlines made history in February, albeit for the wrong reasons. On 26 February the US Department of Transportation fined it $500,000 for failing to assist passengers and their families following the crash of an Asiana 777-200ER in San Francisco in July 2013, the first time the DOT has imposed such a fine.
ASIA-PACIFIC AIRLINE NEWS: FEBRUARY SNAPSHOT
Air Costa orders 50 Embraer E-Jet E2 aircraft, with purchase rights for 50 more.
VietJet formalises order for up to 100 Airbus A320 family aircraft
Qantas reveals A$252 million 1H2014 loss, slashes 5,000 jobs
Asiana fined $500,000 for inept response in aftermath of July 2013 777-200ER crash
AirAsia defers 19 A320 aircraft
ASIA-PACIFIC AIRLINE TRAFFIC: JANUARY
Passenger load factor was up more than one percentage point among selected Asia-Pacific carriers in January to 78.2%. Passenger traffic growth of 12% among the carriers outpaced the 10% additional capacity added during January to help lift load factor.
While load factor was higher among a number of carriers in the region, there was a sharp fall at Thai Airways - falling more than seven percentage points. Demand during its peak season has been hard hit amid political unrest in the country, on top of new Chinese tourism regulations reducing the number of visitors to Thailand, just as the carrier has been expanding.
The Star Alliance carrier, whose 2013 financial fortunes have also been compounded by large currency losses, has said it expects demand to continue to struggle in the first quarter in particular, but is upbeat it will recover in the second half of 2014.
AAPA MEMBER TRAFFIC BY MARKET: DECEMBER
Asia-Pacific carriers suffered a second consecutive month of load factor decline as traffic growth of 5.4% fell short of the extra 6.1% capacity added by AAPA carriers. Over the full year AAPA carriers' load factor was fractionally higher as traffic growth of 5.3% more than matched the extra capacity carriers in the region added.
ASIA-PACIFIC AIRLINE FLEET SUMMARY: FEBRUARY
Figures from Flightglobal’s Ascend Online database show 6,496 aircraft in active service among Asia-Pacific airlines in February. There are 469 stored aircraft – just short of 7% – of the overall Asia-Pacific fleet.