New York (AirGuideBusiness - Airline Finance News Asia / Pacific) May 13, 2012
IATA Reports Strong March Gains in Air Passenger Numbers. Premium and economy air travel were both up significantly in March from a year ago, according to theEInternational Air Transport AssociationE(IATA). The number of passengers traveling in business and first class on international markets was up 8.6 percent in March compared to the same month in 2011. Economy class travel also showed significant growth, increasing 8.9 percent on a year ago. Part of the reason itOs up is because of the impact of the Japanese tsunami and the Arab Spring, which depressed travel last year. Although those events exaggerated the improved figures, IATA says that premium travel was about 4 percentage points higher this March than it would have been in the absence of the Arab Spring and the Japan earthquake and tsunami, but that still has the market growing at a solid rate of over 4 percent in March. And economy travel would have been up 7 percent without the effect of the tsunami and Arab Spring. Growth in other regions of the world were also strong in March when compared to a year ago, expanding 4.9 percent and 6.7 percent, respectively, consistent with positive economic indicators from the U.S. and Germany. Travel within Europe also showed similar degrees of improvement in March, particularly for premium travel, which increased by 3.1 percent from a year ago, up on the February contraction of 0.8 percent. This result, however, is in contrast to the weak economic backdrop in Europe, where business confidence continues to decline and economic growth contracted for a second consecutive quarter. IATA said that an improving global business environment is helping airlines. World trade is up two percent over a year ago and leading indicators of business travel are showing further increase, with the Purchasing ManagersO Index signaling a modest expansion in business confidence for the fifth consecutive month. May 7, 2012
Air India Air India Risks Losing Bailout As Pilots Agitate. State-owned Air India risks losing a USD$5.8 billion government bailout, India's civil aviation minister said on Thursday, as industrial action by pilots disrupted flights for a fourth day. The national airline, which has been surviving on taxpayers' money, is scheduled to get USD$1.3 billion in fresh equity from the government in the current fiscal year but this is linked to its performance. "Pilots need to understand that if Air India does not meet the performance yardsticks set in the plan, that money will not reach them. It's not a one-time deal," minister Ajit Singh said. India's civil aviation industry is suffering under high fuel costs, low fares and a combined debt of USD$20 billion. Five of the country's six main carriers are losing money. Cash-strapped Air India was forced to cancel at least 30 flights on Thursday alone, after more than 150 pilots did not report for work, demanding exclusive rights to fly new Boeing 787 Dreamliners. "The government is not going to keep on pouring money into Air India anymore," the minister said. "Nobody is indispensable." The carrier has sacked three dozen pilots since the "calling in sick" agitation began on Sunday night and a court has declared the action illegal. "Air India is in a very bad financial situation. They are not able to pay their employees, they have not cleared airport dues," Singh said, adding that it owed billions of rupees to fuel suppliers. About 500 Air India pilots who fly international routes have been demanding their colleagues from former state-owned partner Indian Airlines should not be trained to fly 787s, as it may hurt the career prospects of original Air India staff. The two companies were merged in 2007 but there have been problems with integration. A federal auditor last year was critical of Air India's purchase of 787s for "imposing an undue long-term financial burden". The government would not bow to the pilots' demand, Singh said. "If a lot of pilots keep reporting sick... it will cause disruption. But the prospect of disruption is not going to stop us from taking firm action," he said. Singh said the government was open to private investment in Air India, which has nearly a fifth of the domestic market, but it would take this up on a case-by-case basis. "There are a lot of people trying to enter this market," the minister said. "Air India has lots of assets, and I am not talking about only monetary assets. They have the routes, they have the pilots, they have the parking spots." May 10, 2012
Air India, Boeing Air India Seeks Proposals To Raise USD$800 Mln. State-run carrier Air India has invited offers from banks to raise up to USD$800 million via external commercial borrowing and bridge financing, two documents posted on the company's website showed. A bridge financing of up to USD$500 million will be used to fund its purchases of four Boeing 787 Dreamliners, while the ailing national carrier plans to raise another USD$300 million through overseas debt. The documents, posted on Air India's website, showed that the bridge loan will not be covered by the federal guarantee, but the aircrafts or other equivalent means can be used as security. The government had last month extended a life line to Air India, which is on course to receive a USD$5.8 billion bailout by 2020. Its 19 lenders are also restructuring USD$4.2 billion in loans. The airline was forced to cancel four international flights after about a 100 pilots called in "sick" late on Monday, in a...