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Old October 1st, 2005, 04:32 AM   #1081
babystan03
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Oct 1, 2005
Tiger Airways' sale of Manila-Macau tickets

By Karamjit Kaur
Transport Correspondent

AGAINST THE RULES?
S'pore has no traffic rights for the route, says PAL

APPROVED IN PRINCIPLE?
Green light from authorities secured, says Tiger

PHILIPPINE Airlines (PAL) has accused Singapore's Tiger Airways of breaching regulations by selling Manila-Macau tickets even before the route receives the approval of the Philippines' Civil Aeronautics Board (CAB).

But Mr Tony Davis, chief executive officer of the budget airline, responded yesterday, saying: 'We believe we have the necessary approvals to operate the route, which is why we are selling tickets now.'

Tiger started flying from Singapore to Clark Field, about an hour's drive north of Manila, in April this year.

The Straits Times understands that it also has in-principle approval from the Philippine authorities to operate a Clark-Macau-Clark service, the airline's first route outside Singapore.

An industry insider said it is common in some countries for written approval to come just a day or two before actual flights start.

Tiger, which is backed by Singapore Airlines, intends to start the service on Oct 31.

In a DowJones Newswires report yesterday, a spokesman for the Philippine national carrier accused Tiger of making the formal application to the CAB only after it had started selling tickets in July.

He further alleged that the budget carrier filed the necessary papers only when the Philippine civil aviation authority found out about the ticket sales.

The spokesman said: 'Under the Philippines-Singapore bilateral air agreement, Singapore carriers like Tiger Airways do not have traffic rights to fly to Macau from any Philippine point.

'What now is the legal basis of Tiger Airways' action to sell tickets on a proposed Clark-Macau-Clark service?'

But Mr Davis said that services to and from Clark are outside the bilateral air agreement.

He said the Philippine government is eager to develop international services at Clark, which is why Tiger has recently increased its service from three to seven times a week.

He accused PAL of trying to 'frustrate' Tiger's aim to offer Filipinos low fares to Macau.

'This is ironic given that PAL does not intend to operate between the Philippines and Macau,' he said.

Even if Tiger does not compete directly with PAL on the Clark-Macau service, the proliferation of budget carriers in the region worries many national carriers.

The Indonesian government, for example, has banned foreign budget airlines applying to fly to the Indonesian cities of Jakarta, Medan, Surabaya and Denpasar, to protect its own aviation industry.

[email protected]

Copyright © 2005 Singapore Press Holdings. All rights reserved.
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Old October 4th, 2005, 02:17 PM   #1082
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Business Times - 04 Oct 2005

Qantas seeks to expand Jetstar brand globally

Jetstar is looking at a plan for an int'l carrier that can fly on holiday routes

(MELBOURNE) Qantas is looking to expand its low-cost domestic carrier Jetstar into international markets, Qantas chief executive Geoff Dixon said at the weekend.

Qantas and Jetstar are working on a proposal for a two-class international carrier based in Australia, servicing holiday routes where Qantas does not operate.

Mr Dixon said there were major opportunities to expand the Jetstar brand internationally. 'Jetstar is developing a proposal for a two-class, value-based international carrier based in Australia,' Mr Dixon told investors at the Merrill Lynch Australia investment conference.

The carrier will operate on point-to-point markets not served by the full-service Qantas product. 'Initial analysis indicates that this airline could deliver significant cost advantages over the core Qantas operations and many of the competitors, and achieve quick profitability,' Australia's wire service AAP reported Mr Dixon as saying.

'This regional strategy is all about growth in predominantly leisure-based markets in which Qantas has withdrawn over the last 10 years following privatisation and our need to get the company on a very sure financial footing,' he said.

Jetstar, wholly-owned by Qantas, was launched in Australia in May 2004.

Qantas is also focused on developing the Jetstar brand in Asia through its Jetstar Asia operations, with Mr Dixon saying the recent merger of Jetstar Asia and Singapore budget carrier Valuair had provided the combined group with significantly increased scale to pursue expansion opportunities in the region.

'We see significant potential to develop the Jetstar brand in Asia through Jetstar Asia,' he said. 'We're also evaluating a number of options to create a pan-Asian system of value-based airlines which would be able to take advantage of traffic rights available in different ports and provide greater connectivity for customers.'

Qantas has a 49 per cent stake in Jetstar Asia with the remainder held by Singaporean investors.

Qantas itself is expanding its presence in growing point-to-point markets, commencing services to Shanghai and Mumbai and announcing new flights to Beijing and San Francisco.

Meanwhile, Qantas said yesterday that about 600 people had changed plans to travel to Bali after bombings on the resort island killed as many as 26 people and wounded 122 people.

'About half have chosen to use their tickets to fly somewhere else, and the other half have just cancelled their tickets,' a Qantas spokesman said.

He said it was too early to estimate the financial costs since the cancellations were ongoing, with the company allowing passengers until Oct 30 to change their plans. Qantas operates about 20 flights into Indonesia a week, including 11 flights to Bali. - Bernama, Reuters

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.
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Old October 4th, 2005, 02:44 PM   #1083
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Ryanair Hldgs Carried 3.0M Passengers In Sep
4 October 2005
Edited Press Release

LONDON (Dow Jones)--Ryanair Holding PLC said Tuesday that its passenger numbers grew 27% in September, and added that current trading continue to be in line with expectations.

In its passenger statistics for September, the airline said it flew 3,023,819 passengers in September, compared with 2,373,522 in September 2004.

In the rolling 12 months to the end of September, the airline flew 31,617,926 passengers. September 2005 load factor was unchanged at 87%. Load factor for the rolling 12 months to the end of September 2005 was 84%.

Ryanair also confirmed the exercise of 9 further Boeing 737-800 options for delivery in 2007 along with the planned sale (in 2007) of 5 Boeing 737-800's purchased in 1999.

"Current trading continues to be in line with expectations," said Chief Executive Officer Michael O'Leary.

Speaking at an Investor Day in London he added: "Higher fuel prices over the summer months have been partly offset by a combination of other cost reductions and slightly more benign yield environment.

"Passenger volumes and load factors have been strong over the summer and in August we achieved a significant milestone by carrying more passengers on our short haul European network than British Airways (now just the worlds 2nd favourite airline) did on their entire worldwide network.

"Looking forward to the winter we remain cautious. We expect yields to benefit from the multiple fuel surcharges imposed by the high fare carriers across Europe.

"However, we anticipate that the fare differential between Ryanair and the flag carriers will be partially eroded as the fuel surchargers are forced to lower their underlying fares to compete with Ryanair's lower prices.

"We therefore remain cautious but comfortable with our previous guidance for the remainder of this fiscal year as we anticipate strong load factors and passenger volumes but as expected, at slightly lower yields.

"The recent announcement of the cessation of the Boeing strike will in turn enable our aircraft deliveries to be "back on track" by the end of December 2005. We anticipate there will be no material adverse impact on the company's financial performance or passengers carried arising from the strike.

"I am also pleased to announce that we have exercised options to purchase 9 Boeing 737-800's with a value of over $500 million dollars for delivery in late 2007, (3 in September, 2 in October and 4 in November).

"We also plan in late 2007 to sell on the first 5 of our older Boeing 737-800's, which were delivered in 1999. This is a continuation of Ryanair's strategy of operating the youngest fleet in Europe, with the lowest unit operating costs and best technical reliability, thereby ensuring that Ryanair remains the number 1 on-time major airline in Europe. These 4 incremental option aircraft will in turn enable Ryanair to develop even more new routes while we continue to lead the low fare revolution across Europe".

The company currently operates a fleet of 83 Boeing 737-800's and 9 Boeings 737-200's.

The exercise of these 9 options and the planned sale during late 2007 of the 5 aircraft acquired in 1999, combined with the existing firm Boeing commitments will in turn lead to Ryanair's fleet increasing by 151 aircraft to 234 aircraft by 2012.

In addition the company has options over a further 179 aircraft for delivery between 2008 and 2014.
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Old October 5th, 2005, 01:42 AM   #1084
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This story was printed from TODAYonline

Time to review budget airline plan

... as Singapore's high-flown plans for low cost carriers prove to be unworkable

Wednesday • October 5, 2005

MAYBE it is time for Singapore to rethink its involvement in the low cost airline business. It seems to me the odds are stacked against success in the near future.

Valuair has learnt this hard lesson and done the right thing by merging with Jetstar Asia. Jetstar has done one better by slowly changing its business model to become a hybrid airline, aligning itself more closely with major shareholder Qantas.

I would expect Jetstar Asia to start accepting cargo and even put a small business class in front. That's the only way to save itself and to serve the larger Qantas interest of having a regional network.

Only Tiger Airways seems to be holding firm. Its CEO claims that it is the only true low cost carrier (LCC) left in Singapore.

It remains to be seen whether this is a vindication of its model, or simply a reflection of the fact that other carriers have realised that the LCC model cannot thrive here.

In any case, the classic LCC model, the way it was applied in Singapore — with brand-new large capacity planes, high aircraft leasing charges and cost of operation, and only origin and destination (O & D) traffic to depend on — was bound to struggle.

In June 2003, I was asked to do a feasibility study on starting a low cost airline in Singapore.

The brief was very simple: What would it take to have a low cost airline here which would make a profit after six months of operation, flying only to destinations where liberal traffic rights already existed, and to smaller airports in the region where existing carriers could not fly to?

In addition, average fares would have to be at least 50 per cent below the lowest airfares offered by other airlines — yet it would have to be able to break even at 70 per cent load factor.

The study showed that this was possible only if 100-seater used jet aircraft were operated, costing less than a third the lease rate of a new Airbus 320, which all Singapore LCCs use. Seletar Airport would have to be the home base for this airline, which would have to fly high-frequency services to regional destinations not more than three hours' flight time away. It would have to form partnerships with similar small airlines in the region to forge reciprocity.

For various reasons — one being the unavailability of Seletar Airport — the promoters of this venture chose not to proceed. But what this clearly showed me was that a LCC done any other way would struggle financially.

To me, the question now is whether Tiger Airways should continue to exist in its present form or change.

Tiger was created to counter Valuair and Jetstar. Now that Jetstar is likely to become another full service airline like SilkAir, the situation has changed. Should Singapore Airlines now be looking into beefing up SilkAir to take on the new hybrid Jetstar/Valuair?

Singapore is a unique case. As far as I know, no city-state has succeeded with a low-cost airline, let alone by flying brand-new planes over long distances internationally at bargain basement fares.

We had the chance to make LCC a success here, but without anti-competitive legislation and a pro-LCC environment like in Malaysia (where Malaysian Airlines was basically told to keep their hands off Air-Asia), LCCs will struggle here.

Perhaps we need to consider doing two things now. First, go back to the drawing board and nurture the creation of a smaller, leaner entrepreneurial-driven LCC operating out of Seletar Airport.

Second, support SilkAir and Jetstar/Valuair by giving them the traffic rights to enable them to get back into the black.

Tiger, meanwhile, seems determined to do it its own way.

Competition between money-losing airlines is destructive competition. The only way forward is to nurture healthy airlines that can enhance our position as an aviation hub. There is an opportunity now to do this, in view of the prevailing pro-consolidation and rationalisation mood.

The authorities, too, need to step in and require new airlines to become cash positive, if not profitable, within a specific period.

The writer is an aviation consultant and senior tourism and hospitality executive in a public-listed company in Singapore.

Copyright MediaCorp Press Ltd. All rights reserved.
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Old October 5th, 2005, 02:40 PM   #1085
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Business Times - 05 Oct 2005

M'sian firm seeks to start S'pore-Senai bus service

AirAsia distances itself from Johor airport shuttle bid

By OH BOON PING

(SINGAPORE) A little known Malaysian company is trying to start a two-way direct bus service from Singapore to Senai Airport in Johor, although authorities here have previously blocked such services.

When contacted by BT, Nabil Abd Kadir, the managing director of Nakiwa Sdn Bhd confirmed that the company is in the process of setting up the bus operations.

He claims his company is talking to Malaysian budget carrier AirAsia for the new venture.

AirAsia has, however, denied the two are in talks.

Mr Nabil said the application for an operating licence 'would be filed through our associate company in Singapore.'

He declined to disclose whether it had been filed or through which company here.

He said the frequency of the service, however, will depend on the number of AirAsia flights and its passengers here.

'AirAsia plans to fly Singaporeans to China from Senai Airport and I had offered our bus service to AirAsia to transport passengers between Singapore and Senai,' Mr Nabil was cited as saying in Malaysia's Business Times earlier this week.

'He (AirAsia chief Tony Fernandes) said he is open for further discussion,' Mr Nabil said.

Though talks are still in its preliminary stage, Nakiwa, with a fleet of 24 buses, hopes to launch the Singapore-Senai service with 10 buses by the end of this month.

The Malaysian daily also reported that Nakiwa, which had invested RM11 million (S$4.9 million) in this service, is expected to boost its fleet to 200 by October next year.

But Nakiwa is unlikely to realise its plans anytime soon.

AirAsia has distanced itself from the purported bus venture.

'We are not in any form of negotiations with Nakiwa,' AirAsia spokesman Jeamie Lee told BT.

'I have checked with the management to confirm the news, and found the news to be untrue,' she added.

The new Malaysian bus service could also face hurdles in Singapore.

In March last year, Singapore's Ministry of Transport stopped a direct ground shuttle service from Lavender MRT station in Singapore to Senai as it did not allow direct bus services between the Republic and the Malaysian airport except for passengers of Malaysia Airlines.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.
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Old October 6th, 2005, 03:48 AM   #1086
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Ryanair orders 9 more Boeing 737-800 planes

WASHINGTON, Oct 5 (AFP) - Budget airline Ryanair Holdings has exercised options for nine additional 737-800 airplanes from Boeing, in a deal worth more than 500 million dollars at list prices, the two companies said Wednesday.

The companies said five of these airplanes will replace 737-800s in Ryanair's current fleet that were delivered in 1999.

Deliveries of the new airplanes will begin in September 2007, they added.

Irish-based Ryanair operates 92 Boeing 737s. With the latest announcement, it now has 239 737s on firm order with an additional 179 options.

"The 737 continues to be the airplane of choice for successful, established low-cost carriers like Ryanair," said Marlin Dailey, vice president of sales for Europe and Central Asia at Boeing Commercial Airplanes.

"You simply can't beat its economics, efficiency and reliability. It's a key ingredient in the recipe for success among carriers around the world," he said.

The new 737-800s will be fitted with blended winglets, which will improve fuel efficiency and reduce takeoff noise.
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Old October 6th, 2005, 02:51 PM   #1087
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Business Times - 06 Oct 2005

Tiger Airways secures funding for four new aircraft

SINGAPORE - Singapore Airlines Ltd's low cost carrier affiliate, Tiger Airways, on Thursday said it has secured full funding for four new passenger planes it has ordered.

The aviation capital arm of the Royal Bank of Scotland will fund Tiger Airways' purchase of four Airbus A320 planes on a sale and lease back basis, which involves the airline selling the four aircraft to the bank and leasing them back on long term operating contracts.

The airline did not provide further details about the funding structure.

The four aircraft, which will be delivered in 2006 and 2007, are part of a recently announced order by Tiger Airways for a total of eight new A320 aircraft from Airbus, which have a combined list price of over US$500 million, the airline added.

Tiger Airways said it intends to triple its fleet from the current four aircraft by the end of 2007 to enable the airline to fly four-five million passengers a year from its current half-a-million passengers.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.
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Old October 7th, 2005, 07:11 PM   #1088
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EasyJet Carried 2.7M Passengers In Sep
7 October 2005
Edited Press Release

LONDON (Dow Jones)--EasyJet PLC said Friday that it carried 2.7 million passengers in September, up 16.5% from the same period a year ago.

The group reported a load factor of 86.4% in September, down 0.5 percentage points from 86.9%.

For the rolling 12 months ending September, the company carried 29.6 passengers (load factor 85.2%) earning it revenue of GBP1.34 billion compared with 24.3 million passengers (load factor 84.5%) for the 12 months to Sep. 2004 which earned it revenue of GBP1.09 billion.

Chief Executive Ray Webster said: "September passenger growth was in line with expectations."

"On top of double digit volume growth, unit revenue (total revenue per seat flown) for the full year has increased by 2.1% vs. last year.

"We re-iterate our guidance from August: that we expect reported pre-tax profit for the year ended September 2005 to be broadly in line with last year," Webster said in a statement.
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Old October 10th, 2005, 12:14 PM   #1089
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Quote:
Originally Posted by Monkey
Rolling 12 month passenger totals to August 2005:
EasyJet = 29,169,743
Ryanair = 30,967,629

Percentage increase in passengers since August 2004:
EasyJet = 22.2%
Ryanair = 27%

Load factor (ie percentage bums on seats) in August 2005:
EasyJet = 88.4%
Ryanair = 98%
Rolling 12 month passenger totals to September 2005:
EasyJet = 29,557,640
Ryanair = 31,617,926

Percentage increase in passengers since September 2004:
EasyJet = 21.4%
Ryanair = 27%

Load factor (ie percentage bums on seats) in September 2005:
EasyJet = 86.4%
Ryanair = 87%
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Old October 11th, 2005, 06:19 AM   #1090
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Most of the times when travelling Regional Europe, Ryanair and easyjet are two of the best options ... between the two, I go for Ryanair.
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Old October 13th, 2005, 01:06 AM   #1091
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Quote:
Originally Posted by babystan03
Business Times - 05 Oct 2005

M'sian firm seeks to start S'pore-Senai bus service

AirAsia distances itself from Johor airport shuttle bid

By OH BOON PING

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.
Don't think it'll happen at all.....
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Old October 13th, 2005, 01:12 AM   #1092
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Oct 13, 2005
Indonesian budget airline flying to S'pore

By Arthur Poon

INDONESIAN budget carrier AdamAir has pipped its rival Awair to secure air rights to Singapore.

AdamAir, which took to the skies in December 2003, will ply the Singapore-Jakarta route three times a day from Oct 28.

Its Indonesian rival Awair, backed by Malaysia's AirAsia, dropped its application for the same route after the Civil Aviation Authority of Singapore (CAAS) delayed giving it the green light in March.

At that time, it was seen as a 'tit-for-tat' policy after Indonesia imposed a blanket ban on foreign budget carriers including Singapore-based Tiger Airways and Jetstar Asia flying to its key cities such as Medan, Surabaya, Jakarta and Bali.

It is understood that Indonesia wants to give state-owned airline PT Garuda Indonesia time to prepare for increased competition and so stopped giving out new landing rights to budget carriers.

But Valuair flies twice daily to Jakarta and Tiger to Padang. Both obtained their air rights before the ban in March.

Singapore will be AdamAir's second international destination after Malaysia's Penang, said AdamAir's executive vice-president Dave Fikarno. The airline is offering passengers transfer to 15 Indonesian cities on its route network.

An AdamAir return ticket to Jakarta costs $231 including taxes, while Singapore Airlines (SIA) and Valuair charge $489 and $329 respectively, according to their websites.

Standard & Poor's aviation editor Shukor Yusof said: 'AdamAir's success in getting the rights to fly to Singapore probably stems from its future plans to fly direct from Changi to Bali, Medan and Surabaya.'

Awair is believed to have failed to provide additional documents in its unsuccessful bid to get approval, he added.

'Perhaps Awair was unaware of certain Singapore regulations,' Mr Shukor said.

According to CAAS, passenger traffic between Singapore and Indonesia reached 3.3 million last year, up from 2.7 million in 2003.

SIA has 56 weekly flights to Jakarta, 21 flights to Denpasar and six to Surabaya. Valuair is also preparing to start daily services between Singapore and Surabaya from Oct 23.

Copyright © 2005 Singapore Press Holdings. All rights reserved.
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Old October 13th, 2005, 10:20 AM   #1093
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Quote:
Originally Posted by babystan03
Don't think it'll happen at all.....
I agree, AirAsia has been trying to get a into the SG Market for a long time. They can fly to Changi with their Indonesian and Thai Associate companies but thats about it.
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Old October 15th, 2005, 05:06 AM   #1094
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Oct 15, 2005
Why no-go for Awair, while Adam Air gets nod

BOTH are Indonesian carriers and both want to fly here. But while Adam Air got the green light on Oct 5 for its Singapore-Jakarta route, Awair is still waiting.

Why? Simply because Adam Air, which will start its Singapore-Jakarta service in two weeks, is not a budget airline, the Civil Aviation Authority of Singapore (CAAS) said yesterday.

Awair, on the other hand, is a budget carrier, and until Indonesia lifts a ban on foreign budget airlines flying to four key Indonesian cities, the Singapore authorities will not let them fly here either.

Indonesia blocked access to Jakarta, Medan, Surabaya and Denpasar for foreign budget carriers in March this year to protect its fledgling air transport industry.

As a result, the application to the CAAS from Awair, which is 49 per cent owned by Malaysia's AirAsia, has been gathering dust.

Awair has since resorted to the next best thing and now operates between Batam and Jakarta instead.

Adam Air's spokesman here told The Straits Times that the return fare to Jakarta will be $231, including taxes.

Passengers will get assigned seats as well as light snacks and mineral water.

Each passenger is allowed a maximum luggage allowance of 25 kg, significantly more than the 15 kg usually offered by budget airlines.

Speaking to an Indonesian publication last month, Adam Air's president Adam Adhitya Suherman described it as a 'boutique' airline.

He said: 'We target middle-class travellers. We are a three-star airline with five-star service.'

To start with, Adam Air will ply the Singapore-Jakarta route once a day, but plans to expand to three flights a day.

The new route enables the airline to offer passengers from Singapore the chance to connect onward to 15 Indonesian cities on its network.

KARAMJIT KAUR
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Old October 16th, 2005, 10:48 AM   #1095
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EU probes Ryanair deal at Shannon
16 October 2005
The Sunday Independent (Ireland)
CONOR SWEENEY
European Editor EXCLUSIVE

IRELAND faces an embarrassing battle with Brussels over the discount deals given to Ryanair so it would develop a hub at Shannon Airport.

The European Commission has complained to the Government that it was never notified of special fees the State-owned airport offered the budget airline.

The intervention from the EU is just the latest major problem to confront Transport Minister Martin Cullen. His office is responsible for informing the Commission of any aviation developments.

Last night, the Commission revealed that it is also conducting a widespread investigation across Europe into Ryanair's airport contracts.

If these are found to be in breach of EU law, then it could have severe repercussions for the airline's low-cost strategy.

When contacted, Mr Cullen's officials acknowledged they had received the correspondence.

"We can confirm we received the letter. We now have roughly two months to respond," said a spokesman for the Transport Minister.

Taxpayers could also have to foot the bill if the deal is found to be illegal. The EU could fine the Government millions if it feels Shannon's terms amount to an illegal subsidy for Ryanair.

The airline also faces being forced to hand back money too. It could either withdraw from the nine new routes it established or end up paying higher fees.

In a letter received by the Government in the past few days, the director general of the Transport directorate, Francois Lamoureux, has demanded answers on the deal.

He warns that the reduced passenger and landing fees for Ryanair should have been first cleared in Brussels. The airline also received €500,000 in marketing assistance from Shannon Airport to base four new Boeing 737 planes there.

The case closely resembles another row with the European Commission, which Ryanair lost, over the special deal it received to develop operations at Charleroi Airport in Belgium.

It led to the airline's chief executive, Michael O'Leary branding the Commission "the evil empire".

The long-running row continues in the European Courts, but Ryanair was ordered to pay back around €4m and rewrite its contract at Charleroi.

Last night the European Commission refused to comment on the Shannon case directly. But instead revealed that there is a widespread review of the special rates Ryanair has negotiated around Europe.

"We're investigating complaints against Ryanair and other low-fare airlines at a number of airports," said the Commission's Transport spokesman. "But just because we're looking into them, doesn't mean the airline's are doing something wrong."

Usually, complaints about Ryanair stem from other airlines being squeezed by the tough competition. Just days ago, another investigation was launched at Tampere airport in Finland. Authorities there insist it is completely legal since Ryanair uses an older terminal than the other airlines at Tampere.

It is unclear how, following the tremendous publicity the Charleroi row attracted, the Government did not think to clear the deal with the Commission. EU rules stipulate that taxpayers' money must not be used to subsidise airlines in a manner that enables them to establish an unfair advantage over competitors.

According to recently published guidelines, the Commission does allow some discount incentives, so the Shannon deal may be legal.

Shortly after Aer Rianta was split into three semi-autonomous airport authorities last year, Ryanair negotiated the special terms at Shannon in November.

It announced it would base new planes there, expand to 14 routes connecting with Britain and continental Europe, and create 200 new jobs delivering two million passengers per year to the West.

Since May this year it opened routes to Luton, Gatwick, Nottingham, Barcelona, Dusseldorf, Hamburg, Milan, Malaga and Stockholm. For the first year, it only has to pay a fee of €1.50 per departing passenger and nothing on arrivals. The airline gets charged around €2.50 per passenger on existing routes.

Strategically, European expansion by Ryanair was intended to cushion the shake-up at the airport, should it lose the compulsory Shannon stopover on US-bound flights.

Minister Cullen has become one of the EU's most enthusiastic supporters in favour of quickly concluding a deal with the US that would liberalise the entire trans-Atlantic aviation sector.

He argues that the benefits of better tourism links to the US and more routes for Aer Lingus that would stem from an 'open-skies' deal, outweigh the eventual loss to Shannon Airport of the current compulsory stopovers.
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Old October 17th, 2005, 01:06 PM   #1096
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17 October 2005

AirAsia complains over discrimination on landing rights

KUALA LUMPUR : Malaysian budget carrier Air Asia has accused Singapore of discrimination after the city state awarded long sought-after landing rights to a rival Indonesian carrier, a report said Monday.

The Civil Aviation Authority of Singapore (CAAS) this month granted Indonesia's AdamAir the rights to three daily flights from Jakarta after stalling an application from AirAsia's Indonesian affiliate Awair.

"Suddenly, AdamAir gets the right to fly to Singapore which appears to be a decision that discriminates against us," AirAsia's chief executive Tony Fernandes told the Financial Times newspaper.

A dispute with Jakarta has seen Singapore banning new Indonesian low-cost carriers, but the CAAS said it had given AdamAir the greenlight because it did not "consider the airline a low-cost carrier", based on its operating model.

However, the airline, which offers assigned seats and light snacks, sells tickets to Singapore that are significantly cheaper than full-fare carriers, and Fernandes accused the republic of trying to protect its own low-cost carriers by barring AirAsia.

Singapore "is a country that is supposed to welcome open competition, but they are scared of us" because the city state's own budget carriers are struggling, he said.

While AirAsia reported its net profit for the year to June as 111.63 million ringgit (29.6 million dollars), budget airline Tiger Airways, a unit of the state-owned Singapore Airlines, and JetStar Asia, in which the government has a stake, are unprofitable, said the newspaper.

"A bigger presence of AirAsia in Singapore would represent a serious threat to Singapore's low-cost carriers. AirAsia has been able to achieve a successful pricing model that seriously undercuts its rivals," a Hong Kong-based aviation analyst was quoted as saying.

Fernandes said Awair would resubmit its application to fly the lucrative Singapore-Jakarta route, but the CAAS said restrictions on Indonesian low-cost carriers were "still in place".

AirAsia was launched as a budget carrier in December 2001 with just two aircraft and has since become a significant regional player, with its business model increasingly imitated by national carriers and a host of new low-cost entrants.

The airline covers most of the major cities in Southeast Asia, with the carrier's network linking Malaysia, Thailand, Indonesia, Singapore, Macau, Vietnam, Cambodia, Xiamen in China and the Philippines. - AFP /ch

Copyright © 2005 MCN International Pte Ltd
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Old October 18th, 2005, 02:16 PM   #1097
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Business Times - 18 Oct 2005

Clearer skies for Singapore budget carriers

JUST when the going was getting increasingly turbulent, Singapore's low-cost carriers (LCCs) have received a lifeline from a most unexpected source: India.

In a move which surprised many industry observers, India offered Singapore-based carriers 2,760 extra seats on routes from Singapore to Bangalore, Hyderabad and Kolkata. The Air Traffic Rights Committee subsequently granted Tiger Airways and its rival Jetstar Asia critically needed new routes to two of these three destinations.

Tiger secured three flights a week to Kolkata, while Jetstar clinched the rights to operate five weekly flights to the Indian IT capital of Bangalore. The Qantas associate was also given permission to bump up its Singapore-Kolkata flights to four per week, from the present three.

No sooner had this piece of good news sunk in when Jetstar's sister discount carrier, Valuair, obtained rights to operate flights to Denpasar in Bali and Surabaya.

This was in return for Singapore granting additional capacity and 'fifth freedom' rights to Garuda Indonesia and rights to Indonesia's AdamAir to operate Jakarta-Singaporeflights. Valuair already operates daily flights to Jakarta.

What a difference a few months can make. Just three months ago, the three Singapore LCCs - like their regional counterparts - were staring at bleak prospects arising from rising fuel costs and closed skies. The new rights to destinations in India and Indonesia have dramatically changed their outlook.

While the latest developments are encouraging, more can be done to free up the commercial aviation regime around the region. While India and Indonesia have started selectively opening up their markets, China has yet to allow foreign discount carriers into its key cities such as Shanghai and Beijing. And more glaringly, there has been no movement on the old Singapore-Malaysia air services agreement to allow the entry of each other's LCCs.

So challenges for regional LCCs remain. Unlike Europe or the US, Asia-Pacific LCCs struggle to get unencumbered air space. For all their pronouncements of solidarity, manycountries in this part of the world remain driven by nationalist and protectionist instincts. Thailand is the proverbial 'low-hanging fruit' for the Singapore LCCs. But many of these routes are holiday destinations subject to seasonal variations in traffic. In contrast, American and European LCCs serve a steady stream of cost-conscious travellers and inter-city business commuters.

Meanwhile, the lack of a good network of cheap secondary airports and longer flying times put pressure on yields and leads to sub-optimal capacity utilisation. As a result Asian LCCs enjoy only a 20 per cent cost advantage over their full-service competitors, compared to 60 per cent enjoyed by their counterparts in the West.

This, and the absence of laws against unfair competition, makes them more vulnerable to predatory pricing from full-service carriers.

India and Indonesia have become unlikely saviours for some of these operators. But Asia's budget airline operators will be hoping that this liberalisation trend catches on around the region.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.
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Old October 19th, 2005, 03:11 AM   #1098
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This story was printed from TODAYonline

Qantas to expand Jetstar franchise

New budget airline part of 5-year plan to cut $3.8b in costs

Wednesday • October 19, 2005

Qantas Airways is planning to launch a sister airline to Jetstar — Jetstar International — which would fly from Australia to South-east Asia, China and possibly Japan in the second half of next year, according to a report in the Sydney Morning Herald.

The newspaper reported yesterday that Qantas' plans to hive off a large chunk of its international operations to its low-cost Jetstar franchise are "well advanced".

The budget airline, which will fly to destinations within 10 hours of Australia, forms a major part of Qantas' five-year plan to slash A$3 billion ($3.8 billion) from its cost base, said the daily.

The national carrier is understood to be looking at purchasing and leasing up to 100 new medium- and long-range aircraft for the new airline. Jetstar International is expected to be run separately from Jetstar, which itself will launch international flights to New Zealand on Dec 1, said the Herald.

It is expected the new carrier will take over less profitable international routes, such as Bali, Manila, Bangkok, Fukuoka in Japan and even Honolulu, the paper said.

The carrier is also expected to open up more routes into Asia from smaller capital cities, such as Adelaide and Perth.

Given the new Jetstar's longer range, it is speculated it will have two classes — economy and premium economy (or business). Aside from addressing Qantas' cost base, the new Jetstar is also aiming to stem the growing incursion of carriers such as Emirates and Singapore Airlines on air traffic into Australia, said the newspaper.

Qantas' share of the international market into Australia fell to 28.3 per cent from 30.4 per cent in the year to June.

Copyright MediaCorp Press Ltd. All rights reserved.
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Old October 20th, 2005, 07:07 PM   #1099
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20 October 2005

Low-cost carriers need to focus more on branding: industry players
By Chua Chin Chye, Channel NewsAsia

SINGAPORE : All low-cost carriers bank on low fares as a major selling point, but industry players say that does not mean they can do away with branding.

They were speaking at an industry seminar on Tuesday, during which Tiger Airways shared how it intends to make its business thrive, despite high fuel costs.

McDonald's and Coca-Cola are big names with great brands, and low-priced products.

Industry watchers say that low-cost carriers can aspire to become great brands just like them.

Karthik Siva, Group Strategy Director, Ogilvy and Mather, Singapore, said, "The common complaint is always that an LCC ( low-cost carrier) is a commodity. It's not true at all. There are so many other commodities, categories which have become very commoditised, where you have very very strong brands. Where orange is a commodity, but you prefer Sunkist. If you are an LCC, while it's important to focus on low fares, you have to focus on the experience that you plan to deliver to your customers."

One low-cost carrier says it all boils down to giving customers a great experience, at a low price.

Tony Davis, CEO, Tiger Airways, said, "What we have to do is to make sure that consumers have a high level of trust in Tiger Airways. They know we are reliable, we are on time, that we deliver their bags to them when they arrive. And that we still offer the very lowest fares. And I think what we tried to do consistently is to under-promise and over-deliver."

Despite high oil prices, Tiger Airways has managed to resist imposing fuel surcharges, unlike its parent, Singapore Airlines.

Mr Davis said, "I think it's very likely that high oil prices will be with us for some time in the future. What we have tried to do is to make sure we (get) as much efficiency into the rest of our operations. We are using our aircraft more. We are getting more flights from each aircraft each day. That means our overall cost base is still coming down."

To keep unit costs down, Mr Davis says low-cost carriers need to increase the size of their operations, by adding more routes and optimising aircraft usage. - CNA/ms

Copyright © 2005 MCN International Pte Ltd
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Old October 22nd, 2005, 04:54 AM   #1100
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This story was printed from TODAYonline

LCC terminal a white elephant?

Tiger only carrier committed so far as CAAS welcomes all airlines

Weekend • October 22, 2005

Singapore will open its $45-million low-cost airline terminal in a few months, even though it risks becoming a white elephant, with only one carrier committed to using it.

The terminal is due to open early next year, but so far only Singapore Airlines' low-cost affiliate Tiger Airways plans to operate from it.

Singapore was the first country in the region to take advantage of the rapid growth in low-cost carriers, or LCCs, and announce plans to build a low-cost terminal. However, with the limited response, the Republic is now prepared to open it to full service airlines as well, putting it in competition with Changi Airport.

"We welcome all airlines to use the low-cost terminal" if it meets their needs, a Civil Aviation Authority of Singapore (CAAS) spokeswoman said.

CAAS is in discussions with some full-service airlines that have expressed interest, the spokeswoman said, without identifying the carriers. The single-floor complex will be about a twelfth the size of Changi Airport's Terminal One and will be able to handle 2.7 million passengers a year, with scope for further expansion should more airlines want to use it.

Tiger carried half a million passengers in the 12 months ended Sept 30, providing an indication of how many airlines the CAAS was anticipating would use the terminal. Singapore's other LCC, Qantas Airways affiliate Jetstar Asia, is not interested in using the terminal.

"We don't see the benefit for passengers if we go to the low-cost terminal. Who wants to walk across the tarmac when it is raining?" a Jetstar Asia spokeswoman said.

The low-cost terminal will be located near Changi Airport. Passengers will have to walk up to 20 metres on the tarmac between the terminal and the aircraft. Analysts say airlines using the terminal could cut their parking and other charges by 25 per cent to 30 per cent

Another possible customer for the terminal is Thai AirAsia, an affiliate of Malaysia's AirAsia, but the airline has yet to decide. Singapore "has held discussions with Thai AirAsia representatives on a number of occasions, and Thai AirAsia is still considering," the CAAS spokeswoman said.

She added that the terminal will open even if no other airline wants to use it. — Dow Jones

Copyright MediaCorp Press Ltd. All rights reserved.
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