Some day-2 notes:
o Plan another major order - reviewing regional models, more narrowbodies, and even widebodies
o Indian carriers are financial basket case. Last 8 yrs lost USD $11bil. Project $1.3-1.4il loses this year
o Govt. seeking to restore FAA Cat-1 status around end of fiscal year (Mar 2015)
o Indian domestic market now 4x larger than 10 years ago.
Air Asia X
o Some complain about over capacity - but its great for consumers. Demand will catch up to capacity
o ASEAN open-skies was overdue
o Since August product rebranding premium economy/business class sales up 20%
o Hybridisation trend is a fallacy. Airlines must make fundamental choice - either LCC or full service. Blurring lines raises cost base but no guarantee on revenues side. Too many carriers become tempted and lose sight of their fundamentals.
o Fly-Thru connectivity growing across network. Using mixed model of two sector pricing, sometimes O&D pricing.
o Becoming a network player was never part of grand plan but its evolving that way as clients look to you for diverse routings.
o First half of 2014, 51% of AAX clients connected - 34% booked fly-thru, 17% self made connections.
o Finalizing government approvals for scheduled service routes. Currently only doing charters and corporate limo flight
o First focus on growing domestically using CRJ200 jets. Intl routes to destinations near Mynamar at future date.
o Expect rapid growth in Indonesia during 2015
o Looking to utilize group owned leasing subsidiary to lease out up to 40 older 737 frames as newer A32x and 737 frames arrive. 9Air China is first outside customer for 3 aircraft. Many of leases could be within Lion Air group however for 2015
o As full service carrier targeting 8-9% base cost improvement. Need to become more efficient on per employee basis also.
o Even with LCC pressures, GA
growing domestically. Up 12% first half of 2014. Citilink subsidiary 27% growth in 2014
o See strong market growth within ASEAN basin
o Seeks deeper partnerships with Skyteam and ANA. Allows expanded network without large capital cost or risk.
o Carried over 1mil pax since transition to LCC Oct 2013.
market desperately needed an LCC. Don't believe what the big airlines would want you to think otherwise
o Under 5% of seats into HKG
operated by LCCs
o Was break-even as of summer. Expect with arrival of few more aircraft will have scale for consistent profit
o Massive opportunity in domestic market. Long list of p2p markets ready to be served directly
o Carriers longhaul ambitions are modest, but seek to serve that value segment
o Only two strategies work in business - 1) be lowest cost producer, or 2) be highly differentiated
o First metal neutral JV
in Southeast Asia will be pooling flying with Tigerair on MNL
o Cost have been reduced by 20% as company transitioned from full service to LCC. Looked at all procedures, contracts, and suppliers.
o Average of fleet is less than 2 years age. Modern technology allows airline to reduce cost
o 2015 might venture into first intl route
o Partnerships with UA
produce not only passengers and revenue, but important knowledge sharing also
o If had a choice would base everything at HND
, though accepts that split Intl network at NRT
reality. Work with partner airlines to maximize flights/options across both airports.
o Existence of LCC is growing Japan market pie as more tempted to fly and do so more frequently. ANA also benefits from this both directly, and though its LCC ventures.
o Still room in the world for smaller carries.
o Looking at smaller non-hub airports and 5th freedom route opportunities
o Considering link with QR
to open up Europe markets.