Airline Finance News - Asia / Pacific

AirGuide Business, Feb 25, 2008

Feb 25, 2008

Air traffic growth in India and China is expected to grow at more than 11 percent a year for the next three years, nearly three times the rate in the United States and double Europe. Boeing expects total plane orders from Asia Pacific to reach 8,350 in the next 20 years, out of the 28,600 planes needed worldwide. Of these, nearly 2,000 will go to Southeast Asia and more than 1,000 to Southwest Asia -- mainly to India, Boeing senior vice president for sales Dinesh Keskar said in a presentation at the airshow. The lack of orders from Indian airlines in Singapore air show surprised some analysts and industry watchers. Feb 22, 2008

Asia's boom in air travel will moderate this year on a possible recession in the United States, but the region's growing wealth and business opportunities may help it weather the storm. The rapid growth of air travel in Asia over the last few years was fueled by emerging wealth in the region and the entry of low-cost carriers such as Malaysia's AirAsia, Tiger Airways and Jetstar, but regional economies are now faced with the threat of slowing Western demand for Asian exports. Feb 22, 2008

The Taiwan Ministry of Transportation and Communications said the island's airlines have been hit hard by the bullet train, especially since Taipei-Taichung service started early last year. According to statistics released by the ministry last week, passenger boardings fell 26.8% to 12.7 million in 2007, the lowest figure since 1992. Feb 21, 2008

Air China, China Eastern Airlines

Air China and China Eastern Airlines discussed a cooperation between their respective cargo subsidiaries in 2006 but a potential 50/50 joint venture was scuttled by a bribery case involving CEA. Air China also is discussing the launch of a Shanghai-based cargo airline with Cathay Pacific Airways. Feb 22, 2008

China Eastern Airlines, Happy Air

China Eastern Airlines will be the first of the country's big three carriers to expand into the niche regional market following CAAC's approval of its joint venture with AVIC I, Happy Air AVIC I will be Happy's controlling shareholder with a 60% stake, while China Eastern Airlines will put in CNY400 million ($55.7 million) for the remaining 40%. The new venture will be based in Xi'an and use Chinese-built aircraft for its fleet, specifically the MA60 and ARJ21. Industry analysts noted the fleet decision was the key to securing approval from CAAC, which announced last year that it would not okay new entrants before 2010 but would consider exceptions for airlines committing to domestically produced aircraft and those operating in the west or northeast of the country. Feb 20, 2008

Far Eastern Air Transport

Taipei-based Far Eastern Air Transport is considering introduction of a strategic investor in order to alleviate its debt burden, according to the carrier's Chinese mainland chief, Shi Jianhua. The carrier held a shareholders conference this week to discuss a reorganization plan. Taiwanese law stipulates that the company must withdraw from the stock market within 60 days once the court rules that it requires reorganization. The airline operates Boeing 757s and MD-80s. Feb 21, 2008

Japan Airlines, JALcard

JALcard ranks sixth in Japan's credit card industry and is estimated by Japanese media to have a market value of about JPY100 billion (USD$925 million). It also boasts a high percentage of wealthy customers compared with its rivals. The Yomiuri newspaper reported in January that Mitsubishi UFJ Financial Group, Japan's biggest bank, would likely win the race for a 49 percent stake in the unit put on the block. Japan Airlines no longer feels in a rush to part with its stake and would like to take a more cautious look at the likely benefits or risks of an alliance with the buyer of the stake, the source said. Feb 21, 2008

Japan Airlines, JALcard

Japan Airlines has put off a sale of a large stake in its credit card unit due to its recent earnings recovery and its securing of a capital boost, a source familiar with the matter said. Japan's largest airline by revenues had been looking to sell a stake in unlisted JALcard to help it restructure, renew its ageing fleet, and pay back debt. But JAL has postponed the sale until after its next business year starting in April, having secured buyers for up to JPY150 billion yen in fresh capital through the issue of preferred shares and a recent improvement in its earnings, the source said. Feb 21, 2008

Lion Air, Boeing

Lion Air orders 56 more Boeing 737-900ERs valued at $4.4 billion. Indonesia's rapidly expanding LCC Lion Air ordered an additional 56 737-900ERs valued at $4.4 billion, bringing its firm commitments for the type to 178. The airline also took purchase rights on a further 50. It launched the 737-900ER program in July 2005 with an order for 30. The -900ERs are replacing a mixed fleet of MD-80s, MD-90s and 737-300s. Feb 20, 2008

Qantas Airways

Qantas Airways announced a proposed merger with Jetset Travelworld that will "create a leading vertically integrated travel services business in Australia with significant growth potential." Jetset will acquire Qantas Holidays and Qantas Business Travel in exchange for a stake that will leave Qantas with a 58% share of Jetset's share capital. The merged company wil generate A$800 million in annual revenue, Dixon said. Jetset shareholders will vote on the deal in April. Feb 22, 2008