Air Arabia targets India and central Asia

Air Arabia said on Monday it had signed leases for six Airbus A321neo aircraft with Los Angeles-based Air Lease Corp. (Air Arabia)
Updated 14 November 2017
0

Air Arabia targets India and central Asia

DUBAI: Air Arabia wants to expand further into central Asia and India as it shrugs off the overcapacity headwinds buffeting some of its regional peers.
The budget airline said yesterday that it had signed leases for six Airbus A321neo aircraft with Los Angeles-based Air Lease Corp. — allowing it to push into longer-range destinations.
“There is room for us to grow in central Asia,” said CEO Adel Ali in an interview on the sidelines of the Dubai Airshow.
“We would like more capacity in places like Turkey and India.
“If we were able to get more capacity into India, especially those cities that are not served, that is something we would look for.”
Air Arabia this year reported record profits despite a severe slowdown in the regional aviation sector, which has cost thousands of jobs as carriers look at ways to trim costs in response to a glut of plane capacity.
Emirates posted its first full-year profit decline for five years in May, following an 80 percent drop in earnings, although its half-year results were looking up according to figures posted Thursday. Abu Dhabi’s Etihad reported losses in 2016 of $1.9 billion.
But the financial pain has not been restricted to the Arabian Gulf’s big three carriers.
Dubai-based Flydubai, a sister company of Emirates and with a budget model similar to that of Air Arabia, lost more than $38 million in the first half of the year — weighed down by falling yields and rising costs.
Emirates and Flydubai this summer said they would integrate some of their operations in a bid to save costs and mop up excess capacity on both of their networks.
The political feud between Qatar and four of its Arab neighbors has also hit the aviation sector, with some airlines, including Air Arabia, being forced to stop flights to Doha.
But despite such economic and geopolitical headwinds, Air Arabia has maintained relatively stable seat loads.
“For the last 14 years, we seem to have been enjoying average year-round 80 percent seat factors and that has not changed,” said Ali.
The carrier currently serves over 133 routes from five regional hubs, including two in the UAE (Sharjah and Ras Al-Khaimah).
The A321neo is considered the longest-range single-aisle passenger jet currently on the market — an important consideration for budget carriers based in the region looking to extend their route networks into Africa, Asia and Europe.
It is the first time Air Arabia has added newer A320 models to its all-Airbus fleet.
The A321neo, which has an expanded capacity of 215 seats, will join the carrier’s existing fleet of 50 A320 aircraft, starting in 2019.


Two US airlines cut China routes as Beijing rivals turn up heat

Updated 21 min 50 sec ago
0

Two US airlines cut China routes as Beijing rivals turn up heat

  • ‘The two China routes ... have been colossal loss makers for us’
  • Chinese passengers arriving at US airports are expected to nearly triple to 12.8 million in 2024 from 4.3 million this year

DENVER/SHANGHAI: Two US airlines on Tuesday cut routes between China and the US, underscoring increasingly tough competition from state-backed Chinese rivals as they aggressively expand their fleets with cut-price tickets.
American Airlines, the largest US carrier by passengers, said it would drop a route between Chicago and Shanghai, canceling the second direct flight from the US city to China in four months. It had canceled a flight to Beijing in May, although it still operates daily flights to the capital from Los Angeles and Dallas-Fort Worth, Texas.
“The two China routes ... have been colossal loss makers for us,” said Vasu Raja, vice president of network and schedule planning, adding that high fuel costs had also made the route unsustainable.
Hawaiian Airlines said it would from October suspend its thrice-weekly nonstop service between Honolulu and Beijing, which it opened in 2014, citing slower-than-expected growth in demand.
Competition from Chinese airlines is expected to grow with the anticipated easing of China’s near-decade-old “one route, one airline” policy, which would allow more local airlines to fly long-haul international routes.
“US airlines are at a severe disadvantage,” said Mike Boyd, president of aviation forecaster Boyd Group. “The majority of demand is China-generated, and that gives Chinese carriers the advantage.”
Chinese passengers arriving at US airports are expected to nearly triple to 12.8 million in 2024 from 4.3 million this year, and the profile is shifting from groups to independent travelers, according to Boyd Group.
United Airlines President Scott Kirby said Shanghai and Beijing had rebounded for the airline after several years of weakness, although revenue per available seat mile (RASM) was below levels of two or three years ago.
“We’ve had several years of weakness as there was an awful lot of capacity growth out of Beijing and Shanghai,” Kirby said on the sidelines of the International Aviation Forecast Summit in Denver.
American and Hawaiian said the route cancelations were unrelated to demands placed by China’s civil aviation regulator on foreign airlines to amend the way they referred to Hong Kong, Macau and Taiwan on their websites.
Chinese state media had earlier this month singled out the two companies and other US airlines as being among the last firms to comply with China’s demands.
“That issue of how Taiwan was displayed on our website had absolutely zero impact on this decision,” Hawaiian’s chief executive, Peter Ingram, said. “Our economic evaluation was well underway long before that issue arose.”