Number of Airlines Passengers Using Dubai International Airport Grew by 15.6 per cent

The number of passengers using Dubai International Airport grew by 15.6 per cent in the first 11 months of the year compared with the same period a year earlier.

The increase signals traffic gains for Emirates Airline and fly Dubai as well as the 130 foreign carriers serving the airport.

Passenger numbers reached 42.9 million to the end of last month compared with 37.1m in the corresponding period last year, driven by significant increases in travel to the Indian subcontinent, the GCC and western Europe.

The positive results in Dubai, the largest airport in the Middle East and the fifth-largest international gateway in the world, according to Airports Council International, are being read as an indication that UAE airlines are on track for a positive year after dealing with major uncertainties brought on by the global downturn.

Paul Griffiths, the chief executive of Dubai Airports, said the airport was crossing a “traffic threshold” after passenger numbers surpassed 4 million in October and last month, with a monthly count of 4 million travellers forecast to become the norm next year.

Passenger numbers have gradually picked up after the global downturn, and now airlines expect business travel to be the next step in the recovery.

“It’s really about the premium business traffic. It’s linked to the strength of the corporate sector, and the pickup in world trade growth, which is continuing,” Richard Batty, a strategist at Standard Life Investments in Edinburgh, told Bloomberg.

Revenue at Air France-KLM, for example, is forecast to rise to €27.2 billion (Dh131.29bn) for the year from next April, up 11 per cent on the year to the end of March this year, according to Credit Suisse estimates, largely because of a rise in premium traffic.

Emirates has become one of the most profitable airlines in the post-downturn world, announcing net profit of US$925 million (Dh3.39bn) in its April to September period this year, a fourfold increase on the same period a year ago.

With more than 150 wide-body aircraft in operation, Emirates is preparing to receive significant deliveries from Airbus and Boeing in the next 12 months, enabling additional route launches.

Etihad Airways, after launching operations in 2003 and building up its services to 65 routes as of this month, is on the cusp of reaching financial milestones for this year and next, said James Rigney, the chief financial officer of the airline. “When we take out the aircraft ownership costs and look at the operating performance of the business, we are profitable,” he told bankers this month in London. “With a fair wind, we believe, we are on target to break even in 2011,” he added.

The budget airline flydubaiis expected to continue its rapid expansion next year. It launched in June last year and now flies to almost 30 cities, including points in Russia, Djibouti and Afghanistan. It has 13 aircraft plans to receive an additional 10 next year, all Boeing 737-800s. The airline is now the second-largest operating from Dubai International Airport.

Air Arabia, which in 2008 many industry analysts said was the world’s most profitable airline, plans to continue its regional expansion next year with the opening of its fourth hub, in Jordan. It already has bases in Sharjah, Alexandria and Casablanca.

In October, RAK Airways relaunched operations and now flies to Jeddah, Cairo, Dhaka, Chittagong and Kozhikode.

The International Air Transport Association has warned that while demand for air travel is growing, an increase in fuel prices could pose a challenge for airlines.

AirAsia Net Profit Reported Increase to RM198.9mil on Higher Passenger Load

AirAsia Bhd’s net profit jumped 43% to RM198.9mil for the second quarter ended June 30, from RM139.2mil a year ago, on the back of strong growth in passenger volumes, ancillary income and higher average fares.

Its revenue for the quarter was 26% higher at RM940.6mil from RM747.9mil a year ago. It reported earnings per share of 7.2 sen versus 5.9 sen a year ago.

For the six months ended June 30, AirAsia posted a net profit of RM423mil on revenue of RM1.82bil.

While AirAsia posted a record quarter, Malaysia Airlines posted a net loss of RM535mil due mainly to derivative losses from its fuel hedges. MAS’ revenue stood at RM3.2bil for the quarter ended June 30.

In a teleconference yesterday, group CEO Datuk Seri Tony Fernandes was confident of a strong second half for AirAsia. He sees a tremendous upside for its operations in Thailand and Indonesia while its ancillary income registered massive growth.

“Forward bookings are looking very good, The fourth quarter is traditionally our strongest quarter. To head into our strongest season on the back of a soaring first quarter and a record-breaking second quarter puts us in a fantastic position,” he said.

During the second quarter, the group’s core operating profit for the period was RM168.5mil, a 31% increase over RM128.4mil core operating profit achieved a year ago.

The core operating profit margin for the period was at 17.9%, 0.7 percentage point higher than the 17.2% core operating profit margin achieved a year ago.

“There were no unrealised translation gains in the quarter as gains from the slight strengthening of the ringgit were offset by losses from the change in the fair value of currency derivatives,” it said in the notes accompanying AirAsia’s financial results.

Commenting on its ancillary growth, Fernandes said: “We have actually reached our target of RM40 spending per pax that we set for the last quarter. We have unearthed a gushing revenue stream that can boost the bottom line and also serve as a buffer to rising fuel prices.”

He said baggage fees and AirAsia Cargo were significant contributors to ancillary income for the group.

Meanwhile, AirAsia’s associates Thai AirAsia Co and Indonesia AirAsia recorded good performance in the second quarter.

“Indonesia AirAsia has staged a strong turnaround and we expect greater things,” Fernandes said, adding that passenger volume grew by 10% year-on-year to 947,786 from 863,440 last year.

In the second quarter, Thai AirAsia recorded a net profit of RM4.9mil on revenue of RM267.4mil while Indonesia AirAsia’s net profit rose to RM39.6mil on revenue of RM233.2mil.

During the quarter, the group carried a total of 6.07 million passengers while the load factor increased to 77% from 75% in the same period last year.

Fernandes said its cost per average seat per km (ASK) of 3.62 US cents was mainly due to higher average fuel cost. He said the average fuel price in the second quarter was US$100 per barrel against US$60 a barrel in the same period last year.

However, its revenue ASK grew by 26% to 4.88 US cents in the second quarter from 3.87 US cents perviously. “I think we remained prudent with hedging, but it’s very useful too – that we’re not trying to bet where the market’s going, we’re just trying to match our forward sales with our oil hedging,” he said when asked on its hedging status.

Fernandes said its net gearing was expected to improved after the deferment of aircraft in 2011. “We have deferred seven A320s for 2011 to 2015. We are planning to reduce aircraft deliveries to 10-12 from 2012 onwards,” he said. He expected AirAsia’s gearing ratio to be below two times from 2011 onwards.

On aircraft financing, he said the financing for all the aircraft in 2010 was secured. As of June 30, the group has a total of 85 planes. Of the total, 50 planes are for Malaysian operations, while Thailand has 20 and Indonesia 15.

Fernandes was confident that the group’s cash balance would surpassed RM1bil by year-end. It has a current cash balance of RM858mil.

“We’ll easily surpass that by year-end. We will be getting re-payment from our associates in Thailand and Indonesia.” He added that with the listing of associates, the amount due from associates could potentially be converted to new shares to maintain shareholding in Thai AirAsia and Indonesia AirAsia.

“It is very premature for me to comment. We believe we have a very strong brand in Thailand. We are not duly concerned. We are not focusing on our competitor, but ourselves,” Fernandes said when commenting on Tiger Airways’ venture into Thailand.

Analysts contacted said AirAsia’s strong performance was above their expectation.

“They (AirAsia) did superbly despite the significant rise in the fuel bill due to the higher oil prices. And that’s largely thanks to the strong growth in ancillary income which sort of ‘offset’ the higher fuel expenses. The deferment of aircraft significantly reduces the debt burden, and should contribute positively to earnings via lower financing costs and better yields through higher loads,” an analyst said.

Another analyst said AirAsia’s operational numbers look very good and were slightly above his expectations.

American Airlines November Traffic, Capacity Declines

AMR Corp., the operator of American Airlines and regional airline American Eagle, said late Thursday that traffic declined at American Airlines and rose at American Eagle in November.

American Airlines November traffic dipped 0.5% to 9.49 billion revenue passenger miles and traffic at American Eagle rose 11.7% to 634.6 million revenue passenger miles from a year ago.
Read more

Etihad Airways Flying More Passengers Than Ever

The Abu Dhabi airline Etihad flew more passengers in July than in any other month in the government-owned airline’s history.

Traffic hit 616,000 passengers in July, an increase of 9% over July last year.

The airline’s 82% occupancy rate was significant given the number of flights operated by Etihad have increased 20% since July last year. New destinations include Melbourne, Larnaca, Athens and Istanbul. Next month the airline begins services to Cape Town in South Africa.
Read more

Airbus Warns Output Could Drop as Much as 25% in 2010 and 2011

Airbus executives warned over the weekend that output at their European factories could fall by as much as one-fourth over the next two years as the aircraft maker and its suppliers adjust to the sharp drop in air traffic and widening losses at the world’s airlines. But the company insisted that it could absorb those cuts without resorting to large-scale layoffs — at least for now. Read more

Alaska Air Group Reports December Traffic

Alaska Air Group, Inc. today reported December operational results for its subsidiaries, Alaska Airlines (Alaska) and Horizon Air (Horizon). Read more

American Airlines Traffic Reported Traffic Fell 8.2 Percent in December

American Airlines said Monday that traffic fell 8.2 percent in December compared with the year-earlier month, with both domestic and international business slowing. Read more