Aviation: International carriers (eg SIA) could continue to see weak momentum, after IATA announced that growth in air traffic slowed last mth, as political unrest in MENA and Jap’s Earthquake slowed air travel. Demenad increased 6% vs 8.4% MOM, while turmoil cut international traffic by about 1%. 1Q11 saw load factors shrinking to an average of 73%, down 2.2 ppt, placing further pressure on already low profit margins (1.45)….
Seperately, Qantas announced it will reduce intl and domestic flying capacity, retire aircraft and cut mgmt positions in response to natural disasters and higher jet fuel prices. Add that carrier needs to act decisively to combat rising fuel costs and natural disasters, just like during the global financial crisis, to ensure ongoing sustainability of business. (Could spell a clouded outlook for SIA)....
In Separate news, Tiger Air could continue to face strong competition, as Air Asia announced plans for a 50-50 JV with online travel agency Expedia, to expand the number of flights, hotels and holiday packages available in Asia. While Air Asia is also currently waiting for the rights to fly into Osaka, one of 10 Jap destinations it has its eyes on.
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