Airline News, March 2011.

A summary of Airline News from March of 2011.

1st Mar 2011


Air NZ to operate ALC’s first Airbus A320

Aircraft financing and leasing company Air Lease Corporation (ALC) has taken delivery of its first of 51 A320-family airliners from Airbus. The single-aisle twinjet will be leased to Air New Zealand.

The airline has designed a one-off livery for the aircraft, evoking the colours of New Zealand’s world-famous national rugby team, the All Blacks. It is the first of two A320s, with International Aero Engines (IAE) V2500 turbofan powerplants, to be delivered to ALC and operated by Air New Zealand.

“This is the first of our new Airbus domestic fleet, with thirteen more A320 aircraft due to be delivered over the next five years,” says Rob McDonald, Air New Zealand’s chief financial officer. “The aircraft will enable us to increase capacity on routes that are beginning to face capacity constraints at some airports during peak times.”

The aircraft is part of an ALC order for 31 A320s and 20 A321s placed at the Farnborough International Air-Show in 2010.

To date, Airbus has sold close to 7,000 A320-family aircraft, with more than 4,500 delivered to more than 320 customers and operators worldwide. According to Airbus, that makes the type the world’s best-selling single-aisle aircraft family.

New Thai-South Korean airline to start operations

Crystal Thai Airlines (CTA), a new Thai-Korean joint venture carrier, was poised to start operations on 2 March as Asian Aviation went to press.

Based at Bangkok’s Suvarnabhumi Airport, the carrier will initially operate one leased Airbus A320 narrowbody twinjet and one widebody A330-200.

The A320 will be used on four-times weekly services between Colombo in Sri Lanka and Dubai in the United Arab Emirates while the A330 will be used for flights linking Bangkok to Seoul’s Incheon International Airport and Muan in South Korea, as well as Phuket-Seoul flights.

Services to Mumbai and Kochi in India, Clark in the Philippines and Bhutan in Nepal will be launched at the end of the year when CTA takes delivery of a second A320. The aircraft will be configured with a two-class cabin, seating 12 passengers in business class and 162 in economy class.

CTA has firmed up plans to acquire more A330 aircraft and A320s in 2012 to increase its frequencies and tap new markets.

The airline is 51 percent owned by three Thais, led by logistics businesswoman Manika Sawasdipan and 49 percent by an unidentified South Korean company with strong ties to the travel industry. The carrier will have start-up capital of 201 million baht (US$7.28 million).

The airline promises to offer low fares with meals on all flights, targeting the leisure market.

According to CTA Vice-President Pittipol Vannarot, the carrier aims to be the third-biggest airline in Thailand within three years, after flag carrier Thai Airways International and low-cost carrier Thai AirAsia.

CTA was set up in late 2009 and received its air operating certificate from the Department of Civil Aviation in Bangkok in April 2010. It had initially planned to start operations on 3 February, but deferred its launch to secure landing clearances from several foreign regulatory bodies.

The airline will be the second Thai joint-venture carrier with a foreign partner. The other is Thai Tiger Airways, between Thai Airways International and Singapore-based LCC Tiger Airways.

Pittipol says there is room for another carrier in the region, since travel demand in Asia is booming.

“Strong economic growth and rising wealth is pushing air travel up in the region,” Pittipol says.

The recovery from the global recession of 2009 has been strongest in Asia, but it is certainly not immune to challenges like volatile oil prices. Asia is home to the world’s three most populous nations – China, India and Indonesia – where close to three billion people live.

An estimated 402 million Asia-Pacific residents travel within the region every year, while 203 million travel internationally.

Pittipol says he is optimistic that CTA is well-positioned to take advantage of booming Asian economies. He adds that the growth of aviation in Asia will continue to be vibrant but more LCCs are sure to surface, adding to the growing competition in the region.

News in Brief

THREE PEOPLE aboard a Japan Airlines (JAL) flight from Tokyo’s Narita airport to Honolulu were injured when the Boeing 767-300ER aircraft hit severe turbulence. JAL says the incident occurred on 11 February at about 3:30am and was caused by wind shear. The injured included two passengers and one member of the cabin crew. The aircraft, which was carrying 239 passengers and 11 crew, landed safely and remains in service.

Nok Air records higher profit

Thai low-cost carrier (LCC) Nok Air posted a profit of 618 million baht (US$22.4 million) for the business year ended 31 December, a jump of 84 percent from the previous year.

Revenue from the carrier’s passenger business increased 37 percent to 3.97 billion baht. The results marked the airline’s best performance since it started operations in 2004.

The Bangkok-based, domestic LCC has gradually been turning its business around, after a major restructuring in June 2008 aimed at stemming losses from the travel demand slump that resulted from the global economic downturn.

Nok Air Chief Executive Officer Patee Sarasin says the carrier sees passenger revenues increasing by about 35 percent in 2011, although profit will probably fall due to rising oil prices.

The airline plans to lease seven Boeing 737-800 single-aisle jetliners and four ATR 72-500 turboprops over the next three years. It currently operates a fleet of 10 737-400s, six of which are leased from shareholder Thai Airways International, alongside two ATR 72-500s, also leased from the national carrier.

These leased aircraft will be returned to Thai Airways when Nok Air takes delivery of the last of the new 737-800s and ATR 72s in late 2013. Nok Air’s network covers 20 destinations.

In a separate development, Krung Thai Bank – which holds a 10 percent stake in Nok Air – has turned down Thai Airways’ offer to acquire its stake for 150 million baht, 20 million baht more than previously offered. A bank official in Bangkok says the offer price remains too low.

“The bank will consider offloading the stake should there be a better offer,” the official adds.

Thai Airways owns 39 percent of Nok Air, with 10 percent stakes held by Krung Thai, the Government Pension Fund, Dhipaya Insurance and private investors. CPB Equity owns a further 6 percent, while Siam Commercial Bank, Thailand Prosperity Fund and King Power hold 5 percent each.

Air China takes delivery of first Boeing Sky Interior

Air China took delivery on 1 February of its first Boeing 737-800 to be fitted with the manufacturer’s new Boeing Sky Interior, making the carrier the first in China to operate an aircraft with the redesigned cabin.

According to the manufacturer, the Boeing Sky Interior offers passengers “an enhanced on-board experience” with larger stowage bins and sculpted sidewalls, a lighting system based on light-emitting diodes (LEDs), with cove lighting and curved architecture and more intuitive passenger service panels.

The new interior is the latest in a series of improvements Boeing is making to its single-aisle Next-Generation 737 range. Next to come will be a package of performance improvements that will cut fuel consumption and carbon emissions by 2 percent – making the aircraft a full 7 percent more efficient than the first Next-Generation 737s delivered, according to Boeing.

The performance improvements to the airframe and engine are now in certification testing, and will be phased into production between mid-2011 and early 2012.

To date, Boeing has gathered 1,689 orders for aircraft with the new interior, from 60 customers around the world.

Transmile Air sells four MD-11Fs

Debt-riddled Malaysian cargo carrier Transmile Air has signed an agreement to sell four MD-11F freighters to Federal Express (FedEx) for US$69.6 million.

FedEx has already taken delivery of the first aircraft. The remaining three are expected to be handed over later this year, after heavy maintenance checks are completed.

According to an official of Transmile Air Services (TAS) which owns the carrier, proceeds from the sale will be used to partially settle the company’s outstanding debt, which stood at US$176.3 million, as of 30 September 2010.

The four aircraft have been parked at Sultan Abdul Aziz Shah Airport, 25km outside Kuala Lumpur, since August 2008. TAS had previously planned to sell the aircraft in 2008, but the carrier was stuck with low offers due to poor market demand for the aircraft, which are 19 years old.

The sale is expected to expedite the restructuring of the cargo carrier. The company was served with a winding-up petition on 4 June 2010, but secured a restraining order from the Kuala Lumpur High Court and has 90 days from 6 January to reach a consensus with creditors on debt restructuring.

Transmile Air’s financial problems started in June 2007, after an accounting scandal broke that left three senior company executives facing charges of giving misleading financial statements. Since then, the airline has had trouble settling its large debt. It also faces potential de-listing from the main board of the Kuala Lumpur Stock Exchange.

Transmile, which started operations in March 1996, is 94.4 percent Malaysian owned, with the remaining 5.6 per cent is owned by a foreign private investor.

TAS says it now has a fleet of nine Boeing 727-200Fs and one 737-300F.


Asian Aviation at a glance