AA India to lower fares, but at a price.

AA does not offer any free check-in luggage and passengers have the option of booking the same at the time of buying tickets. They are likely to get the same policy to India.

For instance, charging for pre-selection of seats is a common global practice but that is not allowed in India.

Other domestic carriers may cut free check-in luggage limit to 15kg from 20kg if AA brings its fee model to India.

They also want to charge again for pre-selection of seats after DGCA scrapped the move the first time round Full-service carrier Air India is already considering charging for meals and giving only snacks and peanuts free.

AA India to lower fares, but at a price.

It's the ultimate irony. While travellers are waiting for really low fares from AA India, Indian carriers are waiting for it to begin operations so that they can increase their ancillary revenue by charging more for things like check-in baggage.

Indian carriers have been planning to reduce the current domestic free check-in baggage allowance of 20 kg to 15 kg.

But the only reason they have not done this so far is the fear of being asked to reverse the move by the Directorate General of Civil Aviation (DGCA).

The aviation regulator had asked airlines to stop charging extra for pre-selection of seats last year.

AAX making comeback to India?

When an airline is given rights it has to begin flying within six months or else the Government takes them back.

Will there be another round of negotiations between Malaysia and India for new allocation of landing rights that can be given to AAX?

Perhaps Fernandes knows something others don't and that is why he is bullish that AAX can make a comeback to Mumbai and Delhi soon!

Well folks, only time will tell!! Heheheheheheheheheh!!

AAX making comeback to India?

Newcomer Malindo Air is also eager to fly there. The cost is still going to be high because the landing and parking charges at Delhi and Mumbai are still the same.

Malindo is waiting for its new aircraft to arrive in June and it has secured rights to fly daily to Delhi some time after June. The rights it received were said to be those surrendered by AAX.

AAX making comeback to India?

If indeed it is true, it will be good but the question is has AAX the landing rights since it had to give them up when it pulled out of the cities.

And if it was finding it hard to sustain the operations, has it found a new way to mitigate the high the cost to want to return so soon?

AAX making comeback to India?

1. Latest Statement: AAX, the long-haul affiliate of AA, will restart flights to Delhi and Mumbai soon.

Previous Statement: January last year, AAX pulled flights from its Kuala Lumpur hub to the biggest Indian cities Delhi & Mumbai.

2. Latest Statement: AA could use its Delhi and Mumbai flights to complement its proposed budget airline in India, which is expected to start local flights in India by the end of this year in a joint venture with local partners.

Previous Statement: The Indian joint venture won't depend on Delhi and Mumbai and would instead focus on smaller Indian cities with its base in Chennai.

Folks, if AAX does fly, it would be a U-turn for the airline after it abandoned both the cities 15 months ago because flying there was too expensive.

AAX cited high fuel costs and high landing and ground handling charges in India for the pull out.

Folks, the risks with aviation:

1. World crisis (ie. war, tourism and epidemic outbreak)

2. Prolong surge in jet fuel price

3. Development of high speed train between Singapore and Pulau Pinang

So how, folks?

AirAsia is having its Fly Home To Vote General Election Promotions now. Enjoy flights to Kuala Lumpur , Johor Bahru , Kota Bharu , Alor Setar , Penang , Miri , Sibu and many domestic destinations from RM29 All-in Fare only.

- Advanced booking required.

- Fares are not available during embargo period.

- Terms and conditions apply.

- Booking from 8th April 2013 to 14th April 2013

- Travel from 2nd May 2013 to 31st August 2013

Go Airasia!! Hahahahahahahahahahah!!!!!!!!

Meanwhile Malindo Air has extended its special fares to/from Kuching and Kota Kinabalu, enabling voters to return home to vote in the General Election.

The special fares are available for immediate booking, for travel between now and July 31.

The one-way all in fares will be applicable on all 168 seats in economy, on all four daily flights to/from Kuching and three daily flights to/from Kota Kinabalu.

AA will increase its flight frequencies between Kuala Lumpur and Tiruchirappali (Trichy), India to 14 times weekly from 11 times weekly starting from May 26.

The additional flight frequencies, available on Wednesdays, Fridays and Sundays, is open for booking with promotional fares (including airport taxes and fees) offered from RM129 one-way.

Go Airasia!! Hahahahahahahahahah!!!!!!!

MRO heavy checks meaning more costs for AAX!

AAX will decide very soon which maintenance, repair and overhaul (MRO) company to select for Airbus A330 heavy checks. The carrier has some A330s due for heavy maintenance checks this year.

AAX traditionally sends its A330s to Lufthansa Technik Philippines. Azran, however, says he is considering giving the work to Sepang Aircraft Engineering (SAE), provided the company is licensed to perform A330 heavy checks.

Latest Statement: AAX, the long-haul affiliate of AA, will restart flights to Delhi and Mumbai soon.

Previous Statement: Last year, AAX pulled flights from its Kuala Lumpur hub to the biggest Indian cities by air traffic, citing high fuel costs and high landing and ground handling charges.

It also withdrew from Paris and London--long haul routes that it operated using four-engine Airbus A340 jets.

Latest Statement: AA could use its Delhi and Mumbai flights to complement its proposed budget airline in India, which is expected to start local flights in India by the end of this year in a joint venture with local partners.

Previous Statement: The Indian joint venture won't depend on Delhi and Mumbai and would instead focus on smaller Indian cities with its base in Chennai.

What a contradicting statement, folks? So how now? Investors have short memories!! Hahahahahahahahahah!!

Indonesia’s rapidly expanding carrier Lion Air will launch another new subsidiary airline by the end of this month.

Batik Air, Lion’s new Jakarta-based full-service subsidiary, will commence commercial flights on 26 April, an airline executive confirmed this week. It had previously been expected to launch in May.

Folks, in the second half of this year, Malindo hopes to fly to China, northern Japan, South Korea and Indonesia from the klia2 & has mapped out a strategy to fly to some 20 destinations such as China, Japan and South Korea over the next two years.

By June this year, Malindo will be adding two more B737-900s and eight more between July and December, folks! Starting from 2014, it plans to add 10 new aircraft a yea.

Malindo Air whole idea is to position Malaysia as a transit hub & to create a hub at klia2 and Kota Kinabalu to bring passengers from Lion Air to Malindo Air and fly them within Malaysia and to Asia!

Hmmmmmmmmmmmm ..... Intereting!!

Folks, Standard & Poor's aviation analyst said it is likely Lion Air will transfer several ATRs from Wings Air to Malindo Air for the latter to begin flights between Subang and Sabah, Sarawak and Singapore, currently dominated by Firefly.

Malindo Air is reportedly seeking an operating licence from the Department of Civil Aviation to fly from the Subang airport, which only allows the operations of propeller aircraft for commercial passenger flights.

At an April 4, 2013 event, its CEO Chandran Rama Muthy did not deny or confirm the rumours, except to say that the airline is "focused on jet operations at the moment".

Folks, if it happens, it will have a detrimental impact on Firefly which is now serving the full-service premium segment using the ATRs and where its fares are no longer as competitive as before (when it was operating as a low cost carrier).

Malindo Air's turboprop operations would be competing head-on with Firefly on the lucrative short-haul routes between Subang and Kuching, Kota Kinabalu as well as Singapore, and Malindo Air is likely to have an advantage over Firefly in offering lower fares.

This in turn could hurt Firefly's parent MAS which has been trying to turn itself around.

But Folks as a consumer, I would welcome Malindo Air's turboprop operations as it would benefit passengers (by giving more choice of routes, frequencies and lower fares)!

Folks, as Malindo remains tight-lipped over its plan to start turboprop operations out of the Skypark Terminal in Subang, industry observers and analysts are not discounting the possibility of the newly-established joint Malaysia-Indonesia airline getting the planes from its major shareholder – Indonesia's Lion Air.

In February last year, Lion had placed an order for 27 ATR 72-600s, which when all are delivered in 2015 will make its regional subsidiary, Wings Air, the world's largest ATR operator, with a total fleet size of 60 comprising 20 ATR 72-500s and 40 ATR 72-600s.

Malindo Air take-off from Subang Skypark in June?

Malindo Air will operate from Skypark Terminal in Subang starting June this year to serve passengers in Malaysia and Indonesia.

It is understood that Malindo Air is in the final stage of negotiations with the Department of Civil Aviation for approval to fly from the airport.

Skypark Terminal is now operated by general aviation companies such as Berjaya Air and FireFly. It also serves turboprop flights.

Sources said Malindo Air is expected to obtain the approval to fly from Skypark Terminal next month.

Malindo Air is eyeing Skypark Terminal to serve new destinations in Malaysia and Indonesia.

Hmmmmmmmmmmmm!!

FLIGHT PLAN

* After FIPB clearance, AA must get a ministry NOC before applying for a flying permit

* Ministry could take detailed look at the viability of AA’s biz plan before issuing NOC

* AA’s low-fare and zero-fare strategy could be seen as affecting its viability

* Officials feel rock-bottom fares could hit the airline & worsen industry health

Folks, it will be interesting to see whether AA offers fares lower than the existing low-cost airlines,” said an aviation consultant with a global audit and consultancy firm.

“It maybe difficult to do so given the operating environment. But after studying the market for such a long time, I’m sure AA would do what is needed to get the NOC and run the airline in a competitive and sustainable manner.”

There you go!

FOlks, AA offers some of the lowest fares in South East Asia.

Its cost of providing each seat or cost per available seat per km or CASK was the lowest globally at $4.1 in 2011. Indian rivals SpiceJet’s CASK was at $4.7 while Jet Airways was at $7.9.

In order to replicate its success formula here, AA must overcome India’s high airport costs and fuel taxes.

According to chief executive Tony Fernandes, AA plans to do this by operating out of Chennai to Tier II and Tier III cities where airport costs are lower and to some states which offer tax sops for flying to smaller towns.

Hmmmmmmmm!! Reallyyyyyyy!!

Latest on MAJOR SHAREHOLDERS

As of 30/11/2012 - TUNE: 710,931,282 units 25.75%
As of 04/04/2013 - TUNE: 646,128,292 units 23.24%

As at 25/09/2012 - EPF: 273,585,900 units 9.84%
As of 05/04/2013 - EPF: 210,277,100 units 7.56% (latest)
- Disposed 05/04/2013 1,500,000

As at 23/01/2013 - WELLINGTON: 324,591,988 units 11.68%
As of 03/04/2013 - WELLINGTON: 250,338,371 units 09.00% (Latest)
- Disposed 03/04/2013 178,780

More selling pressure in the coming weeks? Only time will tell!!

The official said AA was yet to seek an NOC. “I’m sure they are preparing a viable business plan. In principle, we are in favour of the proposal,” he added.

Aviation ministry officials have been quoted as saying that AA may face “procedural issues”, without elaborating.

The official declined to comment on whether existing airlines have expressed any concerns about AA’s entry.

“The applicant must provide a detailed business plan including feasibility report for the routes it wants to fly on and prove its ability to fly on a sustainable basis,” a ministry official said.

“We will assess what kind of fares they plan to offer and whether it would be sustainable, given the tax and cost structure in the industry.

We cannot have uncompetitive fares since it is bad for the health of the industry.

Also, we cannot let the airline go into losses even if its promoters are rich,” the official said.

There you go!

Folks, AA’s strategy of offering the lowest fares in the industry and occasional free seats may stand in the way of getting a no-objection certificate (NOC) from the civil aviation ministry, two officials said.

After a FIPB clearance, AA must secure an NOC from the civil aviation ministry before approaching the directorate general of civil aviation for a scheduled operator’s permit.

Folks, till now AA has had a smooth sail with even finance minister P. Chidambaram coming to its rescue when civil aviation minister Ajit Singh had warned of procedural problems as the Malaysian carrier had proposed a new airline instead of investing in an existing one.

Analysts said the second phase might not be as smooth because it would have to clear certain criteria set by the DGCA, which could be time-consuming.

Wellllllllllllllll??????

AA has already raised enough number of eyebrows with its 2 million seats for free offer where it has sold seats from India and other countries to Malaysian cities and beyond for free – fliers have to pay only airport charges and taxes.

Folks, this has raised the hackles of LCCs in India who are usually restrained from unleashing low fare sales by the ministry and by DGCA.

So how now?

AA set to apply for NoC

The checklist of approvals to be sought before the first AA domestic flight can operate in India is a very long one even after the stage of BCAS approval is reached.

There will be examination of its flight safety and other training, aircraft’s airworthiness, its preparedness on ground handling and a range of other facilities.

It is significant to note that Minister Ajit Singh continues to talk of “procedural” issues with any application AA will make to start an airline.

Singh has, in the past, questioned the airline’s intention to set up a new airline instead of bringing FDI in an already established Indian airline.

So will AA’s proposal be held up at several stages before it gets approved for scheduled operations? This remains to be seen.

Latest on MAJOR SHAREHOLDERS

As of 30/11/2012 - TUNE: 710,931,282 units 25.75%
As of 04/04/2013 - TUNE: 646,128,292 units 23.24%

As at 25/09/2012 - EPF: 273,585,900 units 9.84%
As of 04/04/2013 - EPF: 211,777,100 units 7.61% (latest)
- Disposed 04/04/2013 1,700,000

As at 23/01/2013 - WELLINGTON: 324,591,988 units 11.68%
As of 04/04/2013 - WELLINGTON: 250,517,151 units 09.01%

Sell on any rallies, folks!

AirAsia's Sept take-off may get delayed.

Folks, view the video here: http://economictimes.indiatimes.com/et-now/corporate/airasias-sept-take-off-may-get-delayed-sources/videoshow/19461768.cms

Folks, plane crash is just a dril!

Kota Kinabalu: An aircraft crash mock exercise was conducted by Malaysia Airports Sdn Bhd (MASB) at Kota Kinabalu International Airport (KKIA) yesterday.

The drill was aimed to evaluate the effectiveness of the Airport Emergency Procedure (AEP) during emergencies and to ensure all relevant agencies were well prepared in case of an aircraft crash.

Airasia crash in their final approach to land??

Folks, hope the news is not absolutely true and it is not as bad as we think!!

Any idea, folks?

Latest on MAJOR SHAREHOLDERS

As of 30/11/2012 - TUNE: 710,931,282 units 25.75%
As of 02/04/2013 - TUNE: 646,128,292 units 23.24%

As at 25/09/2012 - EPF: 273,585,900 units 9.84%
As of 03/04/2013 - EPF: 213,477,100 units 7.68% (latest)
- Disposed 03/04/2013 2,000,000

As at 23/01/2013 - WELLINGTON: 324,591,988 units 11.68%
As of 02/04/2013 - WELLINGTON: 250,517,151 units 09.01%

More selling pressure coming? Caraeful now!

AA is a relatively small player in Indonesia compared to Lion Air, which accounted for 45% of Indonesia’s huge domestic market in 2011 including its regional subsidiary Wings Air.

In what is seen as a one-upmanship, Lion Air captured headlines in late 2011 when it exceeded AA’s orders for 200 A320neo from mid-2011 by committing to 201 Boeing 737 Maxs, which are slated for delivery from 2017 to 2026.

AA said it is keen to expand in Indonesia’s domestic market and accelerate expansion of Indonesia AA and close the gap with market leader Lion, after calling off plans to acquire Batavia Air in October 2012.

Folks, the deal would have expanded AA’s share of the Indonesian domestic market from about 2% to 13%.

Such an expansion would be crucial as the airline seeks to stave off competition in what has become a booming sector of the aviation business, folks. So what next to fence off Lion Air? Hahahahahahahah!!

Folks, AA’s real issue would be to stay ahead of the field in Asia’s booming short-haul, low-cost market.

AA’s competitor in the Indonesian market is largely dominated by the Lion Air Group, which has quietly overtaken AA as the largest low-cost carrier group within Southeast Asia.

So how now?

AirAsia and Malindo Airways to square off in India.

Airasia and Malindo Airways Sdn Bhd may see head-to-head competition for passengers from the Indian continent as both airlines are expected to offer their services to the lucrative market by June.

Read more here: http://www.theedgemalaysia.com/business-news/235258-airasia-and-malindo-airways-to-square-off-in-india.html

Latest on MAJOR SHAREHOLDERS

As of 30/11/2012 - TUNE: 710,931,282 units 25.75%
As of 02/04/2013 - TUNE: 646,128,292 units 23.24%

As at 25/09/2012 - EPF: 273,585,900 units 9.84%
As of 02/04/2013 - EPF: 215,477,100 units 7.75% (latest)
- Disposed 02/04/2013 2,000,000
- Disposed 02/04/2013 2,164,100

As at 23/01/2013 - WELLINGTON: 324,591,988 units 11.68%
As of 02/04/2013 - WELLINGTON: 250,517,151 units 09.01%

More selling pressure coming? The risk with AA is 48.29% of shares were held by foreigners.

Remember folks, sell in May and go away!

Folks, as mentioned before sell on any rallies! Also be ready to sell at the first sign of market weakness.

Studies of historical market returns have shown that stocks do tend to do best between Nov. 1 and April 30 of each year.

That realization has generated the popular adage, a saying most investors probably have heard of “sell in May and go away.”

Folks, this list begins with the regulator issuing a letter of NoC, accepting fees for an SOP permit and then issuing another NOC for AA to import aircraft.

Once the new airline has cleared these hurdles, it will have to submit a list of its board of directors and all these people will then have to obtain security clearance from the Ministry of Home Affairs.

As per rules under which the opened up Indian airlines for investment from foreign airlines, the board must have majority Indian members, CEO and others must be Indian and substantial control of the airline must remain in Indian hands at all times.

Once the board of directors has been cleared, the airline will need approval from the Bureau of Civil Aviation Security and then approval of the base from which it plans to operate. AirAsia has already said it plans to operate from Chennai.

The checklist of approvals to be sought before the first AA domestic flight can operate in India is a very long one even after the stage of BCAS approval is reached.

There will be examination of its flight safety and other training, aircraft’s airworthiness, its preparedness on ground handling and a range of other facilities.

So Folks, will AA’s proposal be held up at several stages before it gets approved for scheduled operations? Only time will tell!!

Folks, AA wants to set up a new airline in India from scratch, in which Tata Sons will hold 30 percent equity, Telestra Tradeplace another 21% while 49 percent stake would be held by the Malaysian airline.

The person quoted earlier said that the process of applying to the Ministry of Civil Aviation begins now since approval for the joint venture was received from the Foreign Investment Promotion Board (FIPB) recently.

But the road ahead for AA is a long and perhaps winding one. The aviation regulator DGCA lists a number of things AA will have to comply with before it get a Scheduled Operator Permit (SOP).

The outbreak of bird flu in China is expected to lift the rubber market next week while fast food retail & aviation will tumble!

With regrad to bird flu folks, better a thousand times careful than once dead!! Hahahahahhahahahah!!

SHANGHAI/HONG KONG: Chinese authorities slaughtered over 20,000 birds on Friday at a poultry market in the financial hub Shanghai as the death toll from a new strain of bird flu mounted to six, spreading concern overseas and sparking a sell-off on Hong Kong’s share market.

In Hong Kong, shares tumbled to a four-month low on Friday on worries that the new strain of bird flu infections could become a widespread outbreak and hurt the local economy.

Chinese airlines were among the biggest percentage losers on the day, including China Southern Airlines, China Eastern Airlines and Air China. Cathay Pacific also fell.

In Shanghai, the rising death toll has prompted some residents to stay away from markets with live chickens and ducks.

Careful now!

Cont........

AA plans to scale up rapidly after it launches operations from its Chennai base with three or four A320s, a development that is being watched not only by budget airlines like IndiGo, but also by full-service carriers like Air India, which were able to garner better yields after the grounding of Vijay Mallya-promoted Kingfisher Airlines since October.

The airline, which will be based out of Chennai and will cater primarily to Tier-2 and Tier-3 cities, expects to begin operations by the fourth quarter of calendar year 2013 after all approvals are in place. The partners will initially invest $30-50 million, or over .`250 crore in the venture.

View here: http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/civil-aviation-ministry-tried-to-thwart-airasias-india-plans/articleshow/19369679.cms

Cont.......

Earlier, ET had reported that a host of bureaucratic hurdles could come in the way of AA's flying plans as a miffed civil aviation ministry may cite the airline's losses on south-east Asian routes and lack of airport infrastructure in India to delay or even deny key permissions.

Some of the country's leading airlines have also indicated their opposition to AA's aircraft purchase programme, saying they could lobby with the ministry to scuttle the purchases if they are large in number.

Cont......

The minutes further reveal that the industry ministry or Department of Industrial Policy and Promotion (DIPP), shot down the aviation ministry's opposition saying that the policy allowing foreign carriers to buy 49% stake in Indian airlines "did not refer only to the existing airlines" and that the "policy needed no clarification."

"...the spirit of the FDI policy was to get fresh investment into the country," the DIPP secretary says, as recorded in the minutes.

Cont.........

Later on March 26, when the government gave the final nod to setting up AA India in partnership with Tata Sons and Telestra Tradeplace's Arun Bhatia, Union civil aviation minister Ajit Singh said that this three-way venture could face some procedural problems.

"The AA-Tata airline JV is facing procedural issues. We will support the joint venture," Singh said at a CII conference.

Singh has been pointing out at impending procedural issues for the JV ever since the proposal got FIPB clearance on March 6, without clearly enlisting what they could be.

Cont........

The aviation ministry had also asked the commerce ministry to issue a clarification to the policy on aviation FDI, which would apply to "JVs to be incorporated".

"This would be required not only for the policy in letter, but also in spirit. This was the Cabinet note, which elaborated the background for the policy amendment had clearly delineated that the amendment was aimed at infusing capital into existing cash-starved aviation companies," the aviation ministry had further argued.

So how now, folks?

Cont.........

"The proposal is supported in principle, but the applicant should first set up the company, obtain licence from ministry of civil aviation and then divest to a foreign collaborator in order to follow the policy intent," the civil aviation ministry had argued on March 6 in the meeting of Foreign Investment Promotion Board (FIPB), which had taken up AA's proposal for clearance.

Interestingly, AA India still hasn't approached the civil aviation ministry for a noobjection certificate (NOC), a prerequisite for getting a flying permit — though has shortlisted the name of an India CEO and will also hire cabin crew next week in Chennai.

There you go, folks!

The Economic Times (ET): As Malaysian budget carrier AA readies to spread wings in India announcing hiring plans on Wednesday, documents available with ET reveal that the civil aviation ministry had tried to thwart the foreign airline's India plans.

The aviation ministry had disapproved of AA's India entry, arguing that the Indian promoters — Tata Sons and Arun Bhatia — should have first set up an airline company, obtained a flying permit and then sold off 49% to the foreign partner, minutes of foreign investment proposal-clearing committee, reviewed by ET, reveal.

Hmmmmmmmmmmmmmm!!

1. Noting the earlier postponement of AAX IPO, an MIDF Amanah analyst said the flotation could fly into some turbulence due to it being scheduled to commence after the general election.

2. While the final details have yet to be announced, the proposed IPO is expected to raise about US$250 million (RM775 million) — of which half would be used to repay bank borrowings and 21.5% for capital expenditure.

3. He said AAX share pricing not meet market expectations, “it won’t perform well then and it will be similar to what happened to Astro Malaysia Holdings, where its shares succumbed to selling pressure and ended its first day flat at RM3."

4. “Anyone who bought Astro shares at the IPO price of RM3 per share, would then have sold at a loss.” But, he noted that Astro share prices have since bounced back — partly due to its long history as a mature company, as opposed to AAX.

5. Chin also cautioned that should the AAX IPO not perform, the carrier would need to seek external funding, noting the airline already has plans to sell its first Islamic bonds this year, joining Emirates Airlines.

6. “AAX will likely seek external funding like selling its aircraft or consider leaseback arrangements.”

So how now? From LCC to selling aircraft meh? Hahahahahahahah!!

Folks, ANALYSTS are downbeat on the listing prospects of AAX, given past failures of long-haul lowcost carriers and intensifying competition.

Alliance Research Sdn Bhd aviation analyst Angeline Chin yesterday said: “Asian history of long haul LCCs is not good. The best example of failure is Oasis Hong Kong Airlines, which shut down within two years due to high fuel costs and fare price war.

“The business model of a long-haul LCC has not been proven profitable so far, as most of such set-ups are still relatively early in their business life cycles with huge capital expenditure requirements.

“Moreover, long haul LCCs are likely to be more exposed to an uncertain global economy as well as pandemics such as the recent SARS and H1N1 flu scares.”

She said other major airline groups in the region, particularly full service carriers, may feel compelled to set up their own longhaul budget subsidiaries to counter competition.

Remember folks, sell on any rallies! Heheheheheheheheheh!!