New video from JustPlanes, just released. Air France Airbus A380.
China Southern Airlines (Guangzhou) today (June 20) introduced its 506-seat Airbus A380 on the Beijing – Amsterdam route. The Super Jumbo arrived this morning on its overnight flight from China. China Southern is the first airline to operate the A380 from China to Amsterdam.
Copyright Photo: Xiangrui Huang/AirlinersGallery.com. China Southern Airlines Airbus A380-841 B-6138 (msn 054) arrives in Beijing.
Malaysia Airlines (Kuala Lumpur) is “technically bankrupt” according to its new CEO Christoph Mueller, formerly of Aer Lingus. Mueller announced today at a press conference the company will cut around 6,000 jobs in order to reduce costs. The airline continues to operate normally.
The airline will also rebrand on September 1. Mueller did not want to offer any details on the rebranding.
Mueller also stated the new airline could break even by 2018.
A full review is underway on all routes and some routes will be dropped.
As previously reported, a new legal entity, Malaysia Airlines Bhd (MAB), will replace the technically bankrupt Malaysian Airline System Bhd (MAS).
Read the full report from the BBC: CLICK HERE
An analyst comment from Ken Odeluga, a senior market analyst at www.cityindex.co.uk
There’s a moderate possibility the airline will in practice not be formally declared bankrupt.
We note Malaysian bankruptcy law provides a much lower threshold to judge going concerns than would apply to Malaysian Airlines.
Its balance sheet is remarkably clean under the circumstances with about $810m of accumulated losses including $75m of hedge accounting.
Aside from that, there is no other red ink at all—no significant impairments or other risky effects and its most recent pre-tax margin at 17% is well above MA’s internal run-rate.
The burdens that exist are of course not inconsiderable, but the point is, the airline has been carrying them for longer than its crisis has been going on.
Its bigger problems involve the significant depreciation in the ringgit against the dollar that continues to shave off its room to manoeuvre, not to mention political interference, powerful unions, and more than a whiff of alleged corruption.
MA’s cost base could be about 20% higher than those of its rivals.
Mueller will need in the near-to-immediate term, all his negotiating, persuasive and coercive skills in dealing with all sorts of stakeholders—those which are legitimate and those for whom that term is more arguable.
At least there does now appear to be a will in the State apparatus that wasn’t there a year ago.
Mueller will have the ear of those strong enough to bulldozer parties which might attempt block the root-and-branch reform of the airline that will be necessary to make it what it may never really have been—competitive.
Copyright Photo above: SPA/AirlinersGallery.com. Malaysia Airlines is reviewing its fleet of 13 Boeing 777-200 ERs and will also attempt to find buyers for two of its six Airbus A380s. Airbus A380-841 9M-MNB (msn 081) approaches the runway at London’s Heathrow Airport.
Singapore Airlines (Singapore) is painting two of its Airbus A380s in a special livery featuring a large Singapore flag theme to help celebrate the 50th anniversary. The pictured Airbus A380-841 9V-SKI (msn 034) is the first to be painted.
The airline issued this statement:
Singapore Airlines is celebrating the nation’s Golden Jubilee by having two Airbus A380s in a special livery, featuring a large Singapore flag-themed design on the fuselage.
The first aircraft with the commemorative livery will take to the skies in early June and the second in July. The A380s will be in the livery until the end of 2015, with the aircraft serving Beijing, Hong Kong, London, Mumbai, New Delhi, Shanghai, Sydney and Zurich routes.
The A380 is the world’s largest aircraft and the special livery features a 10m-tall and 47m-long Singapore flag-themed design on both sides of the fuselage. On the two inboard engines is the official SG50 logo.
“Singapore Airlines’ success is closely tied to the success of Singapore. What better way to celebrate SG50 than by proudly flying the national flag around the world on the world’s largest aircraft,” said Singapore Airlines CEO, Mr Goh Choon Phong.
The special livery is one of many initiatives by Singapore Airlines to celebrate Singapore’s 50th birthday.
A special A380 Charity Flight was operated on May 29, on which some 300 beneficiaries of Community Chest will experience a three-hour flight. Beneficiaries will include children with special needs, adults with disabilities, as well as disadvantaged elderly and families, many of whom have never had the opportunity to take a flight.
Activities to celebrate Singapore’s 50th birthday began last year, and included the SIA Charity Run and Charity Gala Dinner, which raised some $2.5 million for Community Chest.
All photos by Singapore Airlines.
Malaysia Airlines (Malaysian Airline System Berhad-MAS) (Kuala Lumpur) today (May 25) was placed into receivership as the company transitions to a new company (Malaysia Airlines Berhad-MAB). The transfer of assets will occur on September 1, 2015. The restructuring could result in the loss of a significant number of jobs as the national carrier downsizes under its 12-point MAS Recovery Plan.
The airline issued two statements:
The first statement:
Khazanah Nasional Berhad, the sole shareholder of Malaysian Airline System Berhad (MAS), today (May 25) announced the appointment of Dato’ Mohammad Faiz Azmi as Administrator for MAS, effective May 25, 2015.
The appointment of the Administrator will facilitate the transfer of selected assets and liabilities from MAS to the new company Malaysia Airlines Berhad (MAB), effectively by September 1, 2015. MAS continues to operate throughout the period up to and including August 31, 2015, after which MAB will operate the business of the airline from September 1, 2015 onwards.
The appointment is a voluntary undertaking by Khazanah and is made pursuant to the Malaysian Airline System Berhad (Administration) Act 2015 (MAS Act), which was passed by both houses of the Malaysian Parliament last year. The MAS Act provides for an effective, efficient and seamless means to transition the business, property, rights, liabilities and affairs of MAS to MAB.
The transition from MAS to MAB is a key component of the 12-point MAS Recovery Plan, which was announced on August 29, 2014, to restructure the national carrier and set it on a path towards sustainable profitability. The MRP also includes conditional investment funding by Khazanah of up to RM6 billion, disbursed on a staggered basis and subject to the fulfillment of strict conditions.
The second statement:
Christoph Mueller, Chief Executive Officer of Malaysian Airline System Berhad (MAS) and CEO-designate of the new airline, Malaysia Airlines Berhad (MAB), assures customers that MAS operations continue as normal with the appointment of the Administrator.
Mueller states, “I assure you our operations are very much business as usual. All MAS flights, schedules, and reservations continue to operate as normal. We remain committed to serving you with our world-class Malaysian Hospitality, and look forward to welcoming you on board Malaysia Airlines.”
“This appointment does not affect our daily operations or existing reservations. You can continue to make reservations in full confidence that our flights and schedules are operating as normal, that tickets sold will be honored, and that our Enrich frequent flyer program continues with Miles and status preserved”, Mueller added.
Today, Khazanah Nasional Berhad (Khazanah) announced the voluntary appointment of an Administrator for MAS. This appointment reflects the continuing and considerable effort to September 1, 2015, when MAB becomes operational with a new business model and a new management team, led by Mueller.
The appointment by Khazanah, Malaysia’s sovereign fund and the sole shareholder of MAS, is backed by the Malaysian Airline System Berhad (Administration) Act 2015 (MAS Act) enacted by the Government of Malaysia. Under the MAS Act, the Administrator plays a critical role to facilitating the transfer of selected assets and liabilities to MAB, which will replace MAS as Malaysia’s new national carrier.
Copyright Photo below: SPA/AirlinersGallery.com. The Airbus A380 are likely to be sold with the restructuring. Malaysia Airlines Airbus A380-841 9M-MNF (msn 114) (100th A380 logo) climbs away from London (Heathrow).
The Emirates Group (Emirates Airline and Emirates SkyCargo) (Dubai) has announced its 27th consecutive year of profit. The profit for the fiscal year was $1.5 billion, up 34 percent from the previous year. The airline issued this statement:
The Emirates Group announced its 27th consecutive year of profit and steady growth across the company, ending the year in a strong position despite the many global and operational challenges during this period. The financial year ending March 31, 2015 also marked the achievement of new capacity milestones at both Emirates and dnata, as the Group continued to expand its global footprint, and strengthen its business through strategic investments.
Released in its 2014-15 Annual Report the Emirates Group posted an AED 5.5 billion (US$1.5 billion) profit, up 34% from last year. The Group’s revenue reached AED 96.5 billion (US$26.3 billion), an increase of 10% over last year’s results, and the Group’s cash balance remained strong, growing to AED 20.0 billion (US$5.5 billion).
“2014-15 was a turbulent year for aviation. The fall in oil prices provided cost relief in the second half of our financial year, however it did not offset the hit to our profitability caused by significant currency fluctuations, nor the hit to our revenue from operational adjustments in addressing the Ebola outbreak, armed conflicts in several regions, and the 80-day runway upgrading works at Dubai International airport (DXB). Achieving our 27th consecutive year of profit and one of our best performances to date, is testimony to the strength of our brands and business fundamentals, as well as the dedication and talent of our workforce,” said His Highness (H.H.) Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group.
The strong rise of the US dollar against currencies in many of Emirates’ and dnata’s key markets had an AED 1.5 billion (US$412 million) impact to the Group’s bottom line, while the 80-day disruption at DXB had an estimated impact of AED 1.7 billion (US$467 million) on Group revenue.
“Every year brings a new set of challenges. In addressing these, we are always guided by the best interest of our people, our customers, and our long-term goals. As a Group, we keep a close eye on our top and bottom lines, but we never take our foot off the gas pedal when it comes to investing to enhance our business performance, and looking after our people. In 2014-15, the Group collectively invested over AED 20.2 billion (US$5.5 billion) in new aircraft and equipment, modern facilities, the latest technologies, and staff initiatives. This was the second highest amount ever in one financial year after last year’s record investment.”
The Group’s employee base across its more than 80 subsidiaries and companies increased by 11% to over 84,000-strong representing over 160 different nationalities.
“Looking ahead, the ongoing uncertainty for many currencies and economic markets around the world will continue to pose a challenge, as will the looming threat of protectionism in some countries. However, we move into the new financial year with confidence, and a strong foundation for continued profitability with our strong balance sheet, solid track record, diverse global portfolio, and international talent pool,” said Sheikh Ahmed. “We will continue on our journey of steady and rational growth, and work even harder to meet and exceed our customers’ expectations.”
In line with the overall profit increase, the Group declared a dividend of AED 2.6 billion (US$ 700 million) to the Investment Corporation of Dubai.
In 2014-15, Emirates increased capacity by 4.0 billion Available Ton Kilometers (ATKMs). For the first time in the airline’s history, Emirates’ total passenger and cargo capacity crossed the 50 billion mark, to 50.8 billion ATKMs at the end of the financial year, cementing its position as the world’s largest international airline.
Emirates received 24 new aircraft during the year, including 12 A380s, ten Boeing 777-300 ERs and two Boeing 777Fs, bringing its total fleet count to 231. At the same time 10 aircraft were phased out, taking the average fleet age to 75 months or approximately half the industry average of 140 months. The airline remains the world’s largest operator of the Boeing 777 and A380 – both aircraft being amongst the most modern and efficient wide-bodied jets in the sky today.
With the delivery of new aircraft, Emirates launched five new passenger destinations: Abuja, Brussels, Budapest, Chicago, Oslo and four new additional freighter-only destinations: Atlanta, Basel, Mexico City, and Ouagadougou. It also added services and capacity to 34 cities on its existing route network across Africa, Asia, Europe, the Middle East, and North America, offering customers even greater choice and connectivity.
The 80-day runway closure at DXB necessitated the grounding of 19 Emirates aircraft, reducing the airline’s capacity by 9%, and causing the reduction of services to 41 destinations over this period. The estimated impact on airline revenue was AED 1.6 billion (US$ 436 million). The Ebola outbreak in Africa prompted route suspensions and increased health and safety screenings at other ports; and geopolitics resulted in the suspension of services and re-routing of flight paths to avoid overflying conflict zones.
Despite these challenges, Emirates revenue reached a new record of AED 88.8 billion (US$24.2 billion). The average price of jet fuel dropped significantly during the second half of the financial year and has supported Emirates’ bottom line improvement. Emirates’ fuel bill decreased by 7% over last year to AED 28.7 billion (US$7.8 billion). Fuel is now 35% of operating costs, down by 4%pts compared to last year. However, fuel remained the biggest cost component for the airline. Total operating costs increased by 6%, compared to a revenue increase of 7% over the 2013-14 financial year.
The airline successfully managed increased competitive pressure across all markets to record a profit of AED 4.6 billion (US$1.2 billion), an increase of 40% over last year’s results, and a healthy profit margin of 5.1%, the strongest margin since 2010-11.
Carrying a record 49.3 million passengers, up 11% from last year, Emirates managed to achieve a Passenger Seat Factor of 79.6%, an improvement compared with last year’s results (79.4%) in spite of a 9% increase in seat capacity byAvailable Seat Kilometres (ASKMs). This highlights thestrong consumer desire to fly on Emirates’ state-of-the-art aircraft, and via efficient routings through its Dubai hub.
Under pressure from the weakening of all major currencies against the USD, passenger yield dropped to 29.7 fils (8.1 US cents) per Revenue Passenger Kilometre (RPKM).
Emirates also improved its premium seat factor despite lingering economic uncertainty and strong competition in many markets. Premium and overall seat factor for the airline’s flagshipA380aircraft outperformed the network, underscoring the popularity of Emirates’ premium and A380 product amongst passengers. At 31 March 2015, Emirates had 59 A380 aircraft in its fleet, serving one out of every four destinations on its passenger network.
To fund its fleet growth, Emirates raised a total of AED 18.7 billion (US$5.1 billion), using a variety of financing structures. Emirates achieved a major landmark when it closed the first ever Japanese Operating Lease on an A380. It also entered into a Japanese Operating Lease with a Call Option (JOLCO) with respect to one A380-800 aircraft to expand the investor base of the A380 into the Japanese market. During the year, Emirates also successfully closed sale and leaseback transactions for five B777-300ERs and one B777-200ER aircraft.
The financing highlight of the year was the successful issuance of a UK Export Finance (UKEF) guaranteed Sukuk bond of AED 3.4 billion (US$913 million) to fund the acquisition of four A380 aircraft to be delivered in 2015. This deal marked the world’s first Sukuk financing supported by UKEF and the largest ever capital markets offering in the aviation space with an Export Credit Agency guarantee.
These deals align with Emirates’ strategy to seek diverse financing sources, and underscore its sound financials and the strong investor confidence in the airline’s business model. Emirates closed the financial year with a healthy AED 13.3 billion (US$3.6 billion) cash flow from operating activities.
Revenue generated from across Emirates’ six regions continues to be well balanced, with no region contributing more than 30% of overall revenues. Europe is the highest revenue contributing region with AED 25.2 billion (US$6.9 billion), up 7% from 2013-14. East Asia and Australasia follows closely with an increase of 3% and AED 24.6 billion (US$6.7 billion). The highest growth with 20% was recorded for the Americas to AED 11.0 billion (US$3.0 billion). Gulf and Middle East revenue increased 4% to AED 8.6 billion (US$2.3 billion).
Across the rest of the globe Emirates saw strong revenue increases from West Asia and Indian Ocean up 11% to AED 9.2 billion (US$ 2.5 billion) and Africa with AED 8.1 billion (US$2.2 billion) in revenue, up 5%.
In line with its customer-focused proposition, Emirates invested over AED 73 million (US$20 million) last year to equip its fleet with free Wi-Fi. By March 31, 2015, 107 of its Airbus A380 and Boeing 777 aircraft offered Wi-Fi services. The airline also opened new dedicated airport lounges in Glasgow and Los Angeles, taking to 37 the number of dedicated Emirates Lounges across the world. Emirates also opened a new 300-seat contact centre in Budapest to support its growth and supplement its language and response capability.
Looking forward to 2015-16, Emirates has to date announced two new routes including Denpasar and Orlando aside from a number of capacity upgrades to existing destinations.
The 2014-15 financial year has been a strong one for Emirates SkyCargo who reported a revenue of AED 12.3 billion (US$ 3.4 billion), a very remarkable 9% increase over last year. Contributing 15% of the airline’s total transport revenue Emirates SkyCargo continues to play an integral role in the company’s expanding operations.
Emirates SkyCargo’s tonnage strongly increased by 6% to reach 2.4 million tonnes in an airfreight market that remained challenging with fast-changing demand patterns. Emirates SkyCargo’s performance highlights its ability to grow revenues against the industry norm. This year, freight yield per Freight Tonne Kilometre (FTKM) decreased by 1%, and was also impacted by the weakening of major currencies.
On May 1, 2014, Emirates SkyCargo marked a major milestone with the move of its freighter operations to its new cargo terminal at Dubai World Central’s Al Maktoum International airport (DWC). Capable of handling 700,000 tons of cargo annually, the new terminal at DWC is equipped with state-of-the-art technology and has the potential for further expansion to handle 1 million tonnes annually, positioning the business for future growth.
At the end of the financial year, the Emirates SkyCargo freighter fleet had grown to 14 aircraft – 12 Boeing 777Fs, and 2 Boeing 747-400Fs.
Emirates’ hotels recorded revenue of AED 693 million (US$ 189 million), an impressive increase of 23% over last year. This positive development was supported by the opening of the second tower of the JW Marriott Marquis Hotel in Dubai, the world’s tallest hotel.
In other news, Emirates SkyCargo, the freight division of Emirates, has announced that Columbus, the State Capital of Ohio in the United States, will join its global freighter network with the launch of a weekly service to Rickenbacker International Airport from May 27, 2015.
The new freighter service to America’s 15th largest city will become Emirates SkyCargo’s 48th destination in its worldwide freighter network and sixth in the US. The announcement was made on the side lines of the 7th Air Cargo Europe Exhibition and Conference taking place in Munich, Germany, where Emirates SkyCargo is showcasing its products and services.
The flight will be operated by an Emirates SkyCargo Boeing 777 Freighter, which has the capacity to carry just over 100 tonnes of cargo, and with its main deck cargo door being one of the widest of any aircraft, enables it to uplift outsized cargo and carry larger consignments.
Top Copyright Photo: SPA/AirlinersGallery.com. Emirates added an even dozen new Airbus A380s during the year. A380-861 A6-EEX (msn 154) departs from Heathrow Airport in London.
Bottom Copyright Photo: Ton Jochems/AirlinersGallery.com. Emirates SkyCargo is coming to Columbus, Ohio starting on May 27. Boeing 777-F1H A6-EFL (msn 42230) taxies at Amsterdam.
Malaysia Airlines (Kuala Lumpur) is planning to downsize its fleet. The financially struggling carrier has put its six Airbus A380s, four Boeing 777-200 ERs and two Maskargo Boeing 747-400F freighters up for sale according to CNN.
The sale of the Airbus A380s will test the Super Jumbo market.
Read the full report: CLICK HERE
Copyright Photo: AirlinersGallery.com. Malaysia Airlines’ Airbus A380-841 9M-MNC (msn 084) taxies at London’s Heathrow Airport.