Airline Finance News - Asia / Pacific

AirGuide Business, Sept 8, 2008

Hainan Airlines

Hainan Airlines reported a net profit of CNY311 million ($45.5 million) in the first half, up 63.9% over the CNY189.7 million earned in the year-ago semester, thanks largely to the appreciating yuan. Operating revenue rose 1.5% year-over-year to CNY6.34 billion but HNA did not disclose the amount of its currency gains. The yuan has been the only reliable contributor to Chinese carriers' bottom lines in 2008, owing to the combined burdens of falling demand, fierce competition and high fuel prices. HNA's operating expenses rose 3.1% to CNY5.45 billion. Passenger boardings fell 3.4% to 7.5 million while cargo volume dipped 1.4% to 101,300 tons. Sep 2, 2008

Kingfisher Airlines

Kingfisher Plans USD$400 Mln Equity Increase. Indian carrier Kingfisher Airlines plans to raise USD$400 million by selling equity to help fund its expansion, its chief executive said on Tuesday. Kingfisher Airlines, which owns discount carrier Deccan Aviation, expects to turn profitable in the next 18-24 months, Vijay Mallya said. He said several investors were interested, but declined to set a timeframe for the fund raising, saying the company would wait for the market conditions to turn positive. Falling crude prices were positive for the airline and Mallya said the company was also taking measures to cut costs and boost efficiency to improve earnings. Oil prices have fallen to under USD$110 a barrel after hitting a record peak above USD$147 in mid-July. Sep 2, 2008

Asiana Airlines

Asiana Airlines dropped 10.6 percent to 3,970 won, leading the wider market's 4.1 percent loss. "The won currency's rapid weakness seen today is a blow to both airlines," said Shin Min-seok, an analyst at Daewoo Securities. Asiana also said it was aware of currency risks and had a long-standing hedging program in place. "Recently there are growing concerns that the airline industry would see a sharp drop in profits and large losses over foreign currency debt, due to high oil prices and the stronger dollar (versus the won)," Asiana said in a statement. "We will be able to keep our operations solid with strength in risk management and an expected rise in air travel demand." Asiana said it saw a KRW68.5 billion gain from hedging deals in the first half, which helped it offset much of its KRW83.2 billion currency-related losses. Sep 1, 2008

Indian Airlines

India's business aviation industry is appealing for the authorities to resolve an investigation into the alleged evasion of import taxes for small aircraft and helicopters by several companies and individuals. New Delhi imposed duties amounting to almost 25% on all aircraft imports in March 2007, but excluded non-scheduled operators two months later after lobbying by the industry. In June this year the customs authority began to investigate allegations that some companies and individuals bought aircraft for personal use without paying taxes by declaring that they were non-scheduled operators. At least 13 aircraft have been seized and more than 200 purchases are being investigated, say industry sources. Some companies have posted bonds totalling Rp10 billion ($229 million) to use their aircraft while the investigations are ongoing, while others have admitted their guilt and paid taxes amounting to almost Rp556 million. Sep 1, 2008