Airline Finance News - Asia / Pacific

AirGuide Business, April 21, 2008

Apr 21, 2008

Chinese airlines are increasingly involved in conflicts with their pilots, who are eagerly poached by private airlines such as budget carrier Spring Airlines as the industry grapples with a pilot shortage and an air travel boom. Many big carriers demand sizeable payments from pilots who seek to break employment contracts and move to other airlines. Apr 17, 2008

Chinese airlines suffered a collective drop in growth in the first quarter owing to a sharp slowdown in international growth caused by depreciation of the US dollar. According to CAAC statistics released, Chinese airlines carried 45.7 million passengers and transported 983,000 tons of cargo in the quarter, up 11% and 12.4% year-over-year respectively. However, those figures were down 4.9 points and 0.9 point respectively from rates in the year-ago quarter. Apr 16, 2008

Chinese airlines, according to CAAC statistics just released, on international routes, passenger boardings climbed 9.6% and cargo traffic was up 13.9%, standing in sharp contrast to growth rates of 23.9% and 25.1% respectively in the first three months of 2007. A similar trend was reflected domestically as passenger boardings rose 11.2% over the year-ago quarter but decreased from the growth rate of 15.1% in that period, a slowdown that industry analysts said was due mainly to a rising CPI that restrained domestic market demand. Passenger load factor in the quarter rose 2.1 points to 75.3% and daily average aircraft utilization fell around 3% to 9.1 hr. Total fleet numbered 1,160 aircraft on March 31. Apr 16, 2008

Cebu Pacific Air, Navitaire

Navitaire reached a deal with Cebu Pacific Air for provision of its New Skies hosted reservation services and SkyPrice revenue management system. Contract terms were not disclosed. Apr 17, 2008

China Eastern Airlines

CAAC announced it will transfer rights to routes operated by China Eastern Airlines in Yunnan Province to other carriers and impose a fine of CNY1.5 million in response to a March 31-April 1 incident in which pilots returned outbound flights to Kunming. CAAC's investigation concluded that the "disgraceful incident" involving 21 flights largely was the fault of disgruntled CEA pilots. It said one of the 21 flights returned for "technical reasons" and two could be attributed to weather. But nine were found to have problems with Quick Access Recorder equipment, making it difficult for investigators to pinpoint the reason for return, and nine others were attributable to "human factors." CAAC told the Shanghai-based carrier to upgrade its QAR equipment within three months. China Eastern has dismissed two senior officials from its Yunnan Branch Co. and suspended 11 pilots. Apr 17, 2008

China Eastern Airlines

China Eastern Airlines has been fined CNY1.5 million yuan (USD$215,000) after several domestic flights returned to their departure airports in what local media described as a pilots' strike. The General Administration of Civil Aviation of China (CAAC), China's aviation regulator, said on Thursday it assessed the fine and suspended the airline's operating licenses on certain routes in southern China's Yunnan province after a probe found no technical reasons to explain most of the flights' return. CAAC will transfer the operating licenses to other carriers and has demanded penalties against China Eastern officials responsible for the incident, it added. Apr 17, 2008

China Eastern Airlines

China Eastern made national headlines earlier this month after 21 flights operated by a unit in Yunnan province returned to their departure airports soon after taking off on March 31 and April 1. China Eastern initially said the flights were disrupted due to bad weather but later acknowledged that a "human element" was involved. Domestic media reports said the pilots had returned to their take-off points in a protest over pay and working conditions. China Eastern on Thursday posted a public apology on its web site and promised proper handling of complaints that resulted from the disrupted flights. Last week, it suspended two senior executives at the unit and grounded pilots involved in the incident. Apr 17, 2008

Japan Airlines

Japan Airlines (JAL) will sell a stake in its credit card unit to Mitsubishi UFJ Financial, a source with knowledge of the matter said on Friday, in a deal reportedly worth nearly USD$500 million. Buffeted by stiff competition and higher fuel prices, JAL has been looking to sell part of the card company to pay down debt and help finance an upgrade of its fleet. The airline said in February it would raise about USD$1.5 billion from lenders and business partners, including UBS, after losing more than USD$590 million over the last two years. That comes after a similar capital raising less than two years ago. The airline will likely sell a 40 percent stake for around JPY50 billion yen (USD$488 million), Jiji news agency reported. People familiar with the deal have previously said that Mitsubishi UFJ, Japan's largest bank, had an advantage over rival bidders such as Credit Saison, due to existing business ties with the card firm. Japanese private equity fund Advantage Partners was also among the bidders, people familiar with the deal have said. JALcard ranks sixth in Japan's credit card industry and is estimated by the media to have a market value of about JPY100 billion yen. It also boasts a higher percentage of wealthy customers compared with its rivals. Apr 18, 2008