Low Cost Airline News - Asia / Pacific

Jan 21, 2008

East Star Airlines

East Star Airlines, the first Chinese LCC to fly outside China's mainland by launching services to Hong Kong and Macau from Wuhan last November, also sealed a strategic cooperative agreement with Citibank for capital financing and IPO consultation. It is negotiating with some private funds for going listed in overseas markets. Industry analysts noted that Chinese LCCs have begun to show their competitive edge in the domestic airline industry but still face significant disadvantages compared to their much larger state-owned rivals. Jan 18, 2008

Juneyao Airlines

Juneyao, one of China's few profitable LCCs, seals foreign investment. Shanghai-based Juneyao Airlines last week sold a 25% stake to a foreign private fund for $100 million, a source at the carrier said yesterday, taking the LCC one step closer toward its goal of listing on an overseas market by early 2009. One of China's few profitable LCCs, Juneyao reported net earnings of CNY18 million ($2.5 million) and a passenger load factor of more than 80% in the first eight months of 2007. CEO Huang Hui noted that the carrier is expected to post full-year net income of CNY25 million. It has become increasingly popular for Chinese LCCs to seek foreign investors to fund growth. Spring Airlines, another Shanghai-based LCC, is close to selling a no-more-than-20% stake to a foreign investor. It has hired Citibank as its financial adviser and plans to go listed in 2009. Jan 18, 2008

Lion Air

Lion Air had said it was looking at possible expansion in six countries such as Thailand, Malaysia, Vietnam, Bangladesh, the Philippines and Australia. Lion has said it plans to raise up to USD$600 million to acquire stakes or set up new airlines in a number of Asian countries over the next five years. The airline currently has a fleet of around 40 jets on 32 routes. Jan 15, 2008

Lion Air

Lion Air has been aggressively expanding in Indonesia's fast-growing airline industry in a country of more than 220 million people spread across more than 17,000 islands. The carrier is also expected sign a 10 year USD$1 billion contract with Delta Air Lines, under which the US airline will provide maintenance and services for its fleet. Indonesia's airline industry has grown rapidly since the government liberalized the sector after the financial crisis in the late 1990s. But a series of accidents has raised questions over whether safety has been compromised and whether the infrastructure and personnel can cope with the huge increase. It has also prompted a ban from the European Union on Indonesian carriers flying to Europe. There have been calls from some Indonesian officials to modernize ageing fleets to help improve safety. Jan 15, 2008

Lion Air, Boeing

Lion Air To Buy More Boeing 737-900s. Indonesia's largest private airline, Lion Air, plans to buy more Boeing 737-900 series jets, to support its regional expansion to a number of countries, including Australia, its top executive said on Tuesday Jan. 15. Rusdi Kirana, Lion Air's president director, said the purchase would be in addition to 122 jets of the same type that the company had previously ordered from Boeing. Lion Air recently ordered an additional 22 Boeing 737-900 series planes as part of its expansion plans, lifting its total orders to 122 jets, with a total list price of USD$7 billion. Jan 16, 2008

Virgin Blue

Toll Holdings Sale Of Virgin Blue Stake Unlikely Soon Report. Australian logistics group Toll Holdings has said a sale of its majority stake in airline Virgin Blue is unlikely in the short-term, the Australian Financial Review reported on Monday. However, Chatfield also said there remained several interested parties in the 63 percent stake, and that the fall in the airline's share price had left it undervalued. Toll acquired its stake in Virgin Blue through its $6 billion-plus takeover of ports operator Patrick in 2006. Jan 15, 2008

ZZ

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