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Old December 20th, 2004, 10:07 AM   #641
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Time is GMT + 8 hours
Posted: 20 December 2004 1245 hrs

Star Cruises, Valuair announce pact

SINGAPORE : Star Cruises and Valuair have announced an alliance that will see the Malaysia-based cruise operator become the Singapore budget carrier's largest shareholder.

The amount of Star Cruise's investment in the airline was not disclosed.

Under the pact, the two companies will coordinate operations and jointly market fly-cruise packages from Singapore, Dow Jones Newswires reported.

With the latest investment, Valuair plans to expand its routes to serve the pan-Asia region including the China and India markets.

The report quoted industry sources as saying Valuair may buy wide-body airplanes capable of flying to destinations such as Sydney in Australia and Taipei in Taiwan.

Valuair currently flies to Bangkok, Hong Kong, Jakarta, and Perth. - CNA

Copyright © 2004 MCN International Pte Ltd
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Old December 20th, 2004, 01:12 PM   #642
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Business Times - 20 Dec 2004

Tiger Airways to double fleet, add more flights

SINGAPORE -Tiger Airways will be doubling its fleet next month by putting two new Airbus A320 jets into service and adding new destinations for the benefit of travellers from Singapore.

The two new aircraft will be used by Tiger Airways to add more services to both Bangkok and Phuket.

Tiger Airways currently operates three daily flights to Bangkok and one daily service to Phuket with flights operating between Singapore and Bangkok.

Tiger Airways will be offering a massive 10,000 low fare seats to both Phuket and Hatyai from Singapore for travel in January 2005 at the low fare of just $48.88 (one way).

The seats will go on sale from 22 December 2004 to 2 January 2005.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.
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Old December 20th, 2004, 03:07 PM   #643
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20 December 2004

Tiger Airways offers 10,000 tickets to Thailand at US$30 each

SINGAPORE : Singapore-based Tiger Airways said on Monday it will offer 10,000 one-way tickets to two popular Thai destinations, the resort island of Phuket and town of Hatyai in the south, for US$30.

The promotional fares, which exclude taxes, is for travel in January and reservations via the carrier's website at www.tigerairways.com or through its call centre can be made starting Wednesday, it said in a statement.

A company spokesman told AFP the carrier is now guaranteeing 10,000 tickets to the two Thai destinations would be sold at S$48.88, or US$30.

During non-promotional periods, fares for a one-way trip start from $50 and increase gradually as demand for tickets increases, he said.

Tiger Airways also announced plans to launch new routes and expand flight services to Phuket and Bangkok when it puts two new Airbus A320 jets into service in January.

"The new flights will be a windfall for savvy travelers," said president and chief executive officer Tony Davis.

"Adding extra flights will also bring even more travelers to Singapore, creating jobs and encouraging regional tourism," he said.

Tiger Airways, one of three Singapore-based budget carriers, currently offers three daily flights to Bangkok and one daily service to Phuket and Hatyai.

The carrier is 49-percent owned by Singapore Airlines.

The other shareholders are the founders of European no-frills carrier Ryanair, state-owned investment agency Temasek Holdings and American investors Indigo Partners. - AFP

Copyright © 2004 MCN International Pte Ltd
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Old December 20th, 2004, 05:09 PM   #644
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UPDATE: Malaysia Star Cruises Buys 20% Stake In Valuair



SINGAPORE (Dow Jones)--Malaysia-based Star Cruises Ltd. (S21. SG) Monday acquired a 20% stake in Singapore budget airline Valuair Ltd., making it the largest shareholder of the airline.

The strategic alliance with the world's third-largest cruise operator is part of Valuair's ongoing second round of financing that will eventually help it buy wide body airplanes to fly to destinations beyond its current five-hour radius.

It raised around S$33 million in the first phase of financing before it started up around May.

In a joint briefing, the companies didn't disclose the amount of Star Cruise's investment. The airline's chairman, Lim Chin Beng, said the amount was "sensitive" as the airline is also in talks with two other parties for capital injection needs. He didn't elaborate.

Industry sources told Dow Jones Newswires earlier that Star Cruises was injecting around US$10 million. Online travel booking company Asiatravel.com Holdings Ltd. (5AM.SG), which has pumped US$4 million so far into Valuair, currently owns 10.8% of the airline.

The deal with Star Cruises involves Valuair issuing new shares, and the funds will be used for adding more destinations, such as points in India and China, and increasing existing flight frequencies.

Valuair's expansion plans don't stop there.

"Every airline has big ambitions. We are no different," said Valuair's Lim, adding that it wants to fly to destinations within a six- and seven-hour radius gradually. He didn't give a time frame.

Such destinations will include "the east coast of Australia, North and East Asia such as Japan, Korea and Beijing and further points in India," he added.

Through the alliance, Valuair and Star Cruises will coordinate operations and jointly market fly-cruise packages from Singapore.

The alliance "opens up a whole new range of possibilities to further enhance and build the sea and air connectivity into Singapore that is an important part of our international sale sand marketing efforts," said Star Cruises Chief Operating Officer Chong Chee Tut.

Currently, about 40% of Star Cruises' passenger load comprises inbound travelers from countries such as India, Australia China, Indonesia, Philippines, Malaysia, Japan and the U.K..

Valuair, which started commercial flights in May and expects to break-even in its second year of operations, faces stiff competition from Singapore Airlines Ltd. (S55.SG)-backed Tiger Airways and Qantas Airways' (QAN.AU) Jetstar Asia (JETSTAR.YY).

Valuair currently operates two flights daily to Bangkok and Hong Kong, and daily flights to Jakarta and Perth, Australia.
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Old December 21st, 2004, 03:51 AM   #645
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Dec 21, 2004
Fly-cruise deals from Star Cruises, Valuair

STAR Cruises' investment in Valuair and the budget airline's plans to extend its flying range have spawned a new series of travel packages that could see Singapore develop into a centre for cruise holidays.

From next year, Valuair and Malaysia-based Star Cruises - which has bought a stake of more than 20 per cent in the airline for an estimated $20 million - will offer combined fly-cruise packages.

Valuair flies to destinations within five hours of Singapore. The Star Cruises investment is part of a capital-raising move that will help the airline purchase bigger aircraft able to fly up to seven hours to more points in Asia, including cities in Japan.

The airline now flies to Jakarta, Bangkok, Hong Kong and Perth, and hopes to add points in China and India to its schedules soon.

Fares and other details of the fly-cruise deals will be revealed later.

At a joint press conference yesterday, Star Cruises' chief operating officer Chong Chee Tut said the deal will allow Star Cruises to cater for more flexible itineraries and different budgets.

Singaporean travellers, Valuair's CEO Sim Kay Wee added, can also look forward to round-trip deals that allow them to fly one way and sail the other.

The companies said in a statement: 'With Valuair's plans to expand its routes... the number of fly-cruise passengers into Singapore is expected to grow significantly.'

Valuair's chairman and founder Lim Chin Beng said the cooperation will develop Singapore as a 'world-class cruise centre'.

It is the first time Star Cruises, which operates 17 ships under the Star Cruises, Norwegian Cruise Lines, Orient Lines and Cruise Ferries brands, has invested in an airline.

Valuair, which started operating in May, raised about $30 million from its first fund-raising exercise in October last year. Mr Lim said the airline is also in talks with other potential investors.

Mr Chong, meanwhile, did not rule out the possibility that the company could work with other regional budget carriers. -- KARAMJIT KAUR

Copyright © 2004 Singapore Press Holdings. All rights reserved.
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Old December 21st, 2004, 12:11 PM   #646
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Business Times - 21 Dec 2004

Hock Lock Siew
Chance for Star Cruises to make Valuair deal fly

By EDDIE TOH

STAR Cruises, traded on Singapore's Clob International and controlled by the sole casino group in Malaysia, has made another bet on the tourism business.

The world's third biggest cruise liner yesterday confirmed BT's report last week that it intends to take a one-fifth stake in Singapore's fast-growing budget carrier Valuair. Star Cruises, controlled by Kuala Lumpur-listed Resorts World, which in turn is a subsidiary of listed Genting, said the alliance would help create fly-cruise packages at attractive prices.

The liner did not disclose the investment cost, but sources estimate the price tag to be in the region of US$15 million. But will the Valuair stake be another financial albatross for the debt-laden liner, or will it help boost earnings?

On the face of it, the deal does have positive features. Valuair could help ferry more regional tourists to Singapore. They could then take Star Cruises' liners to tourist spots in the region.

There is synergy between the two groups as Star Cruises could also channel passengers to the fledgling budget airline. More than 130,000 inbound tourists out of the some eight million arrivals expected in Singapore this year from countries such as Australia, Indonesia and India travel with Star Cruises. In addition, the deal will make Star Cruises the single biggest shareholder in Valuair, giving the liner some leverage in the union.

But it's still not known if debt-laden Star Cruises can afford to pump more capital into Valuair. For a start, Valuair is expected to more than double its current fleet of three planes in the next few years.

It's also unclear if long-suffering shareholders of Star Cruises will give the nod for the company to gear up further. Minority shareholders of Star Cruises have had little to cheer about since the Lim family floated the cruise business in 1997.

The share price touched its peak of US$2 in April 2000 but it has been on a downward spiral since. The share price slipped to its lowest point of US$0.07 in November 2003. Its fortunes improved this year, with the share price swinging between US$0.21 and US$0.36. It closed at US$0.225 yesterday - still a far cry from its peak.

The decline in its share price coincided with Star Cruises' purchase four years ago of Norway's NCL, the fourth largest cruise operator in the world. Although the purchase has boosted Star Cruises's fleet to 20-odd ships, it has eaten into the resources of the Genting-Resorts group. Besides having its cash hoard depleted in 2000, Resorts went into the red for the first time owing to a write-off of the goodwill in the NCL deal and the fall in NCL's share price following the acquisition. Resorts' fortunes have since brightened but Star Cruises has yet to pare down its long-term debts of some US$2 billion.

Hopefully, the investment in Valuair will help bolster Star Cruises' bottom line. The cruise operator, on its part, will need to unwind some of its debts to take full advantage of its investment in the fast-growing airline.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.
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Old December 21st, 2004, 12:20 PM   #647
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Business Times - 21 Dec 2004

Low-cost carriers boost narrow-body jet market

Airbus A320 has been outselling Boeing 737 by 10-to-1, say sources

By VEN SREENIVASAN

(SINGAPORE) The explosive growth of low-cost carriers in Asia-Pacific has resurrected the market for narrow-bodied aircraft in the region, especially for Airbus, whose A320 has been outselling Boeing 737 planes by about 10-to-1 this year, say market insiders.

'There has been a huge fleet transformation across the region over the last five years, with LCCs creating a huge new market for single-aisle aircraft,' said Robert Martin, chief executive of Singapore Aircraft Leasing Enterprise (SALE).

'Five years ago, three-quarters of the regional fleet were wide-bodied aircraft owned by network carriers,' he said.

The proliferation of LCCs has also been a boon for operating lessors like SALE. 'If you are an LCC, you have a limited amount of equity,' Mr Martin. 'You don't want to sink it all into aircraft purchases.'

SALE, which currently has a portfolio of 60 aircraft, has leased narrow-bodied planes to most of the leading regional LCCs, including Jetstar, Jetstar Asia, Valuair, AirAsia and Air Deccan.

Meanwhile, the Sydney-based Centre for Asia-Pacific Aviation has also forecast a huge demand for narrow-bodied jets from intra-Asian air freight operators.

'Airfreight carriage in Asia is frequently a lucrative business,' Peter Harbison, the centre's managing director, noted.

'Rapid organic growth rates aside, the trend towards low-cost passenger operating models in short-haul markets which tend not to carry much cargo, due to tight turnarounds, could also boost the region's requirement for dedicated freighter aircraft. This is certainly a potential in large city pair markets which are currently served by conventional airlines. As low-cost capacity expands and changes the behaviour of all operators, so will new opportunities open up for freight carriage.'

Airbus, in its latest Global Market Forecast, predicts intra-Asian freight markets will expand by 6.4 per cent a year over the next 20 years, well ahead of passenger markets' growth of of 5.9 per cent a year.

But the biggest beneficiary of the growth in demand for narrow-bodied jets seems to be Airbus, with some 400 planes on order.

The European planemaker has just sealed a US$2.5 billion order for 40 A320 planes with AirAsia, and is now negotiating to sell 30 planes worth US$1.8 billion to India's Air Deccan. Its planes are used by 27 carriers in the Asia-Pacific, including Singapore's Tiger Airways, Jetstar Asia, SilkAir and Valuair.

Mr Martin expects the proportion of narrow-bodied to wide-bodied planes to hit 50:50 in the medium term, with Boeing trying to narrow the gap with its European rival.

'Recently Airbus has been very aggressive, but we think 2005 will be a critical year for campaigns, with Boeing preparing for a big push.'

But he pointed out that once airlines had chosen a plane-type, it would be difficult to force them to make a switch.

Asked about the world's other two narrow-bodied planemakers' prospects, Mr Martin said: 'Embraer and Bombardier have to get their prices right to get into this market. They are not using the operating lessors as effectively as Airbus.'

But Mr Martin said that SALE was looking into more procurements next year and was looking to acquire Airbus, Boeing and Embraer jets for delivery when its current order numbers run out in May 2006.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.
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Old December 21st, 2004, 06:09 PM   #648
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Quote:
Originally Posted by szehoong
UPDATE: Malaysia Star Cruises Buys 20% Stake In Valuair
Fwah....now that is wonderful news, and it may the shot in the arm which I think Valuair really needs for its long term future, if the partnership is managed well!
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Old December 22nd, 2004, 03:07 AM   #649
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This story was printed from TODAYonline

Air of opportunities

Asia's airlines cannot afford to miss budget market

Wednesday • December 22, 2004

SYDNEY — With US and European skies crowded with low-cost carriers, Asia is a sure bet as the next frontier for cheap and cheerful travel. But the question on the mind of investors is who will lead the pack.

A flurry of new airlines backed by existing full-service carriers including Thai Airways International and Malaysian Airline System are likely to emerge, analysts say.

Others will have the backing of new investors looking to replicate the success of Australia's Virgin Blue Holdings and Ireland's Ryanair Holdings.

Airlines in Asia are moving away from questioning whether low-cost carriers will succeed in the region to asking if they can afford to miss out on the opportunities, said Centre for Asia Pacific Aviation managing director Peter Harbison.

"I think there will be more subsidiaries (of full-service carriers) coming into the market," he said.

However, investors looking at Singapore as either a base or travel destination should think twice because three low-cost carriers — Tiger Airways, ValuAir and Jetstar Asia — are already based here.

Malaysia's first budget carrier, AirAsia, also operates seven flights a week to Singapore.

Over-populating Singapore — a major hub for international air travel — with budget airlines would risk a brutal fare war and with fuel prices ever susceptible to volatile swings, the onus is on industry executives to do their homework if they plan on being around for the long haul.

Low-cost carriers with financially strong parents such as Tiger, which is 49-per-cent-owned by Singapore Airlines (SIA), and Jetstar Asia, which is 49-per-cent-owned by Qantas Airways, have a better chance of outperforming their peers and surviving for the long term.

The two low-cost carriers should also benefit from their parents' solid bargaining power when it comes to fuel.

SIA has hedged about 40 per cent of its fuel requirements at US$34 a barrel for the 12 months ending March 31, 2005, while Qantas has hedged 70 per cent of its fuel at US$32 a barrel for the year ending June 30, 2005.

"The key thing will be critical size and I think the (low-cost) airlines to survive will need to have a solid base in terms of financial backing, hubs and routes," said Shaw Stockbroking analyst Brent Mitchell.

Australia's flag carrier, Qantas, recently joined the fray by launching its second low-cost carrier, Jetstar Asia, less than seven months after its first budget carrier Jetstar, which operates domestic routes.

Jetstar Asia has commenced a daily flight from Singapore to Hong Kong, and will shortly begin flying to Taipei in Taiwan, and Pattaya in Thailand.

It wants to be the first low-cost carrier to fly to Surabaya in Indonesia, Shanghai in China, and Manila in the Philippines.

Qantas has been a little slow to enter the low-cost market in Asia but is working hard to catch up, according to DBS Vickers Securities analyst Chris Sanda.

"They're doing what they can as far as expanding much more aggressively than the others, which means that they're doing the right thing but at the same time they have a higher risk profile," he said.

While the Asian aviation market is ripe for low-cost carriers, investors are divided on how many will take off next year.

A Sydney-based transport analyst expects the number of players to more than double to 10 next year, with several others to emerge in subsequent years.

But Mr Sanda said "the market is already saturated".

AirAsia has built up its fleet to 23. It is looking to buy 40 new aircraft in the near future to service new destinations that may include the Philippines, China and India.

Tiger recently commenced flights to Bangkok, Phuket and Hat Yai in Thailand, with plans to fly to as many as 10 destinations in the first year.

Its closest home-grown rival, Valuair, has been operating flights to Bangkok, Hong Kong and Jakarta since May. The privately owned Valuair also recently started services to Perth, Australia.

With Singapore brimming with low-cost carriers, the next and most obvious base for operators appears to be Macau, a special administrative region of China with a booming casino market. Air Macau is the only airline flying from the Chinese territory at present.

"Macau is like the back door to China here, in the sense that Macau in its own right is a growing, booming market benefiting from globalisation of the entertainment industry," said Mr Sanda.

After a rapid rise in Australia over the past four years following the collapse of Ansett, Virgin Blue is seeking growth in Asia, possibly by launching a low-cost regional carrier.

Virgin Blue has held talks with Air Macau's shareholders about operating a low-cost carrier from Macau. The much-touted push of the Richard Branson-founded Virgin Blue into Macau is a "good option", said a Sydney-based analyst.

But as aviation history shows, rapid growth often comes at a price.

The big and more financially stable budget carriers that vigilantly follow the low-cost model have a better chance of succeeding than others. The minnows will either be taken over or eventually crash-land, according to analysts.

Consolidation among the low-cost carriers could emerge next year, said Morgan Stanley analyst Chin Lim.

Mr Harbison at the Center for Asia Pacific Aviation, however, believes there is ample room in the Asian market for several more full-service and low-cost carriers, saying: "This market has got so much potential, it's just untapped." — Dow Jones

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Old December 22nd, 2004, 03:24 PM   #650
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22 December 2004

A-Sonic gets 59.8% of Australian regional carrier Skywest
By Thomas Cho, Channel NewsAsia

SINGAPORE : Aircraft retrofitting solutions company, A-Sonic Aerospace, has obtained control of 59.8 percent of Skywest at the close of its general offer for the Australian regional carrier.

The offer expired on Tuesday.

In September, A-Sonic made an offer for all of Skywest at 20 Australian cents a share.

It made the bid through its investment vehicle CaptiveVision.

A-Sonic has announced plans to start a new budget airline in China with Guangdong China Travel Service Holdings.

Operations are expected to begin in the second half of next year. - CNA

Copyright © 2004 MCN International Pte Ltd
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Old December 23rd, 2004, 06:43 PM   #651
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Macau as the other LCC base in this part of the world will be good....I think they both can co-exist quite well since they can serve two key markets in this region.
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Old December 25th, 2004, 02:42 AM   #652
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Dec 25, 2004
Valuair cuts fares for next month
Though move comes hot on the heels of similar promotion by SIA, CEO says it had been planned for some time

By Karamjit Kaur
Transport Correspondent

BUDGET carrier Valuair has cut fares to Bangkok, Jakarta, Hong Kong and Perth, two days after Singapore Airlines unveiled promotional fares to three of those destinations.

Valuair is offering round-trip tickets for $99 to Bangkok and Jakarta, $130 to Hong Kong and $310 to Perth.

But the discounts are not in response to SIA's promotional fare of $98 for limited round-trip tickets to Bangkok, Jakarta, Hong Kong and Taipei, Valuair's chief executive officer Sim Kay Wee said yesterday.

He told The Straits Times: 'We were already planning to launch the promotion during the off-peak month of January and decided to go ahead with it.

'We have a dynamic fare policy that anticipates and responds to changing market conditions, and have been practising this all along.'

Bookings for Valuair's promotion, which is valid for travel next month except during the Hari Raya Haji weekend, open tomorrow and will close on Friday.

The airline's normal minimum fare is $138 to Bangkok, $158 to Jakarta, $238 to Hong Kong and $350 to Perth.

SIA's deal - also for travel next month - is for limited seats on selected flights for passengers travelling in pairs.

In a clear dig at the airline, Mr Sim said: 'For our promotion, we do not have restrictions like two to go, and the discount fares are not confined to unfavourable flight times.'

He did not reveal the number of discount seats which will be available, but promised travellers this much: 'Being an off-peak month, they should have no problems getting the discount fares.'

SIA spokesman Stephen Forshaw said of Valuair's deal: 'The market is a competitive one, and airlines will launch special promotions from time to time.

'Our offer announced earlier this week has been very successful, with thousands of customers taking advantage of $98 return fares to Hong Kong, Taipei, Bangkok and Jakarta.'

Valuair - Singapore's first budget airline - started in May.

Since then, two more have taken off - the Singapore Airlines-backed Tiger Airways and Jetstar Asia, which is backed by Australia's Qantas.

Their low fares have forced big national carriers like SIA to cut prices, to ensure the upstarts do not steal a march on them.

Mr Forshaw said: 'SIA is determined to stake its claim in the market as a competitor on all aspects.

'Customers know they get the best service. They also know that we'll be consistently good value, and new entrants to the market don't have a monopoly on launching good promotions.'

Not to be outdone, Mr Sim said: 'Travellers should constantly visit our website and check out the good deals we offer every now and then.'

Copyright © 2004 Singapore Press Holdings. All rights reserved.
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Old December 27th, 2004, 01:29 PM   #653
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Business Times - 27 Dec 2004

AVIATION: OUTLOOK 2005
New year will do much to reshape air industry

Airlines, the travel market and airport operators will all feel the heat

By VEN SREENIVASAN

THE coming year will be a critical one for the Asian aviation sector. It could be a year when more low-cost carriers (LCCs) emerge across the continent.

It is also likely to be a critical year for national carriers which are struggling on the financial brink. And with more people getting on planes than ever before, the year could also see more industry deregulation and infrastructure outlays.

Today, there are about a dozen LCCs operating in a region where there was none in 2000.

AirAsia has already proven the critics wrong by emerging as the region's dominant LCC player. The company, which has just placed a US$2.5 billion order for 40 new Airbus 320 planes, has already made a huge impact in regional air travel. Besides flying millions of Malaysians around the country, it has also flown half a million tourists - mostly Europeans and Australians - into Malaysia in less than a year since it introduced its Thailand and Indonesia flights.

Tiger Airways, Valuair and Jetstar Asia are already doing the same, using Singapore as their base.

Analysts expect the number of LCCs in the region to double by 2006.

China and India - until now the exclusive domains of their state-owned carriers - are already seeing low-cost start-ups. In India, players like Kingfisher and Air Deccan have been placing big new orders with plane-makers.

Similar order flows will come from China when the first privately-owned LCCs take to the skies next year.

But the proliferation of LCCs is putting pressure on incumbent full-service players around the region.

In South-east Asia, Singapore Airlines is seen as most vulnerable, followed by Cathay Pacific, Thai and Malaysia Airlines.

SIA's share price has underperformed the market by 25 per cent this year on concerns that many of its routes are now rich pickings for LCCs, including its own LCC associate, Tiger Airways. This is despite the fact that LCCs currently cover less than 10 per cent of SIA's whole network, and have low frequencies on these routes.

Real or not, the fact is that the market will read the competition from LCCs as being potentially margin-eroding for incumbents.

But SIA and its legacy cohorts are not sitting still.

Many are fighting back via savvy capacity and management. For example, SIA promptly undercut both Valuair on its Perth routes and Jetstar Asia by offering cut-rate fares to Hong Kong, Taipei, Perth, Jakarta and Bangkok.

At the end of the day, there will be casualties.

As analysts point out, in the US and Europe, LCCs have been effective predators of inefficient, high-cost full-service carriers. It may be early days yet in Asia, but the chinks are already showing in some players.

But it will not be easy for the LCCs either.

Besides predatory pricing practices from well capitalised full-service players, they also have to deal with stubbornly high fuel costs.

The International Air Travel Association (IATA), which represents more than 270 carriers globally, predicted two months ago that airlines may record losses of more than US$4 billion unless fuel prices drop from record highs at above US$50 per barrel.

The impact will be even more devastating for LCCs. This is because fuel accounts for as much as a third of the total operating costs for Asian LCCs, compared to 20 per cent for full-service carriers.

But LCCs in this region have one very important factor in their favour: a huge and growing market.

South-east Asia has about 550 million people, about the same population as Europe. While more than a quarter of Europeans fly regularly, only around 10 per cent of the people in this region have been inside a plane. And this region has about a dozen LCCs, compared to almost 60 across Europe.

There is no denying that LCCs are a growth industry across Asia.

Boeing projects that passenger traffic in the region will grow an average 6.1 per cent each year until 2023, compared with a global average of 5.2 per cent.

The success of AirAsia aside, the Asian LCC phenomenon has barely graduated from the 'embryonic stage' to the 'growth stage'. It took 14 years (from 1971 to 1985) for LCCs in the US to get through these two stages. Then came the shakeout stage between 1986 and 1988.

But the pace of their growth and route expansion will also depend on the ability and willingness of Asian governments to open up their markets. In the US, the growth phase was fuelled by the 1978 deregulation of the country's domestic market.

If Asian governments are reluctant to deregulate for fear of hurting their national carriers, LCCs will be confined to an increasingly limited number of 'skinny' and crowded point-to-point routes defined by bilateral agreements. This could speed up their move towards the shakeout phase, with only the best capitalised players emerging intact when the dust settles.

Fortunately, most countries around the region are liberalising, albeit slowly.

Singapore is further ahead than the rest. With LCCs already accounting for about 10 per cent of the passenger traffic at Changi, Singapore is positioning itself to be a regional LCC hub by building its $45 million budget carrier terminal, which will be ready by early 2006.

For plane-makers, 2005 will be critical in terms of order mandates. Many industry watchers expect Boeing to go for a big push after losing out to rival Airbus this year.

And the battle is likely to be fought most intensely in the single-aisle aircraft market.

Plane-makers expect single-aisle aircraft with more than 100 seats to continue dominating the world's passenger fleet, with more than 15,100 such aircraft expected to be brought into service by 2023.

About a third of new single-aisle aircraft will be delivered to low-cost operators in the Asia-Pacific.

All in all, 2005 could be the defining year for the Asian commercial aviation market.

It could separate the winners from the losers, and differentiate the men from the boys, not just among airlines, but also travel markets, airport operators and plane-makers.



Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.
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Old December 27th, 2004, 05:16 PM   #654
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Wow..impressive graphic!! Where did you get it from?
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Old December 27th, 2004, 05:40 PM   #655
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Wow..impressive graphic!! Where did you get it from?
Business times......
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Old December 31st, 2004, 05:32 PM   #656
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The url isnt showing business times leh. It was a pdf file?
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Old December 31st, 2004, 05:36 PM   #657
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The url isnt showing business times leh. It was a pdf file?
Emm....I save the picture file then paste it using the imageshack........
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Old January 3rd, 2005, 04:53 PM   #658
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03 January 2005

A-Sonic takes 21.1% stake in Airocean for S$27.5 million
By Michael Lim, Channel NewsAsia

SINGAPORE : Aircraft equipment supplier A-Sonic Aerospace is making yet another move to beef up its operations in China, this time by taking a stake in Airocean.

A-Sonic is subscribing to all the 110 million shares that the freight-forwarding company is placing out.

The deal is worth S$27.5 million, which A-Sonic will fund through both internal resources as well as bank borrowings.

Both A-Sonic Aerospace and Airocean are seeking to expand their operations in China.

They have already tied up for two joint ventures in China, one of which is an express courier business.

On its part, A-Sonic is looking to launch a low-cost carrier in China, while Airocean wants to set up a freighter service.

"A-Sonic, through our announcement of a LCC in last September, is looking for a passenger license. Of course, on our account, Airocean, we are seriously pursuing a freighter license just for the domestic part of China which we want to focus on; and this freighter license will serve the domestic cargo market of China," said Airocean CEO Thomas Tay.

Airocean says China's domestic express courier cargo market could potentially be worth some US$14 billion.

With Monday's deal, A-Sonic will own up to 21.1 percent of Airocean, making it the largest shareholder in the company.

And the two partners say they do not rule out forging closer links, including a merger.

"I cannot rule out this possibility. The two companies know each other no doubt for a short period of time; but we share a lot of visions together. We share the common playing field together, that is China; we share the common market together, that is the aviation industry," said Airocean's Tay.

"I would say that we are keeping all options open," A-Sonic CEO Janet Tan said.

The deal is still subject to shareholder agreement from both companies.

But for now, analysts say Airocean's logistics capabilities in China will tie in well with A-Sonic's plans for a low-cost carrier. - CNA

Copyright © 2004 MCN International Pte Ltd
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Old January 5th, 2005, 02:51 PM   #659
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Business Times - 05 Jan 2005

AirAsia's Indonesian joint venture to fly to Singapore this month

KUALA LUMPUR - Malaysian budget carrier AirAsia will start flying between Singapore and Jakarta this month though its Indonesian joint venture, PT AWAir.

The flights, which will begin Jan 19, will be AWAir's first international route since AirAsia bought a stake in the Indonesia-based airline last year.

AirAsia, Southeast Asia's biggest and only publicly listed low-cost carrier, last year spent a token US$2 on a 49 per cent stake in AWAir, which had ceased operating in 2002.

The route will be the second to Singapore run by an AirAsia associate.

AirAsia's 49 per cent-owned Thai AirAsia associate currently flies between Bangkok and Singapore.

Analysts have long praised AirAsia's focus in entering joint ventures in which the company has a minority stake but management control, allowing the Malaysian carrier to quickly and easily launch routes between and within countries across Southeast Asia.

In Wednesday's statement, AirAsia said AWAir will also start daily flights between Jakarta and Surabaya on Java island from Jan 9, as well as twice-daily flights between Jakarta and Bali.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.
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Old January 6th, 2005, 06:26 PM   #660
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Sigh...another cheap option to a city I am not planning to visit yet......and you guys heard of the price slash to Bangkok too? Sianz.
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