AirAsia X Gets Two New Investors

Japanese leasing firm Orix and Bahrain-based Manara Consortium have taken a 20 percent stake in Malaysian budget long-haul carrier AirAsia X for MYR250 million ringgit (USD$77.26 million), the airline said on Thursday.

The airline, which counts British billionaire Richard Branson as a shareholder, said Manara, comprising four Saudi investment groups and Orix, would each receive 16.7 million new shares of AirAsia X.

"The share placement represents an important phase of AirAsia X's growth plans with proceeds raised from the transaction allowing the airline to fund aircraft orders already placed with Airbus and further fleet expansion," AirAsia X said in a statement.

The airline, 16 percent owned by Malaysian budget carrier AirAsia, has ordered 25 Airbus A350 planes.

Following the share placement, Aero Ventures, which is owned by AirAsia Chief Executive Tony Fernandes and his business associates, would hold 48 percent of AirAsia X and Britain's Virgin Group, controlled by Branson, a 16 percent stake.

AirAsia X, which currently flies from Kuala Lumpur to Australia's Gold Coast and Hangzhou in China, aims to fly 10 million passengers a year within five years and expects to list its shares on the Malaysian stock exchange by 2010. (Reuters)

Korean Air To Buy 3 More Airbus A380s

Korean Air will purchase an additional three A380 superjumbo jets from Airbus on top of five jets it had earlier agreed to buy, a company official said on Wednesday.

The additional purchase by South Korea's largest carrier came through exercising an option contained in the original contract, the official added, but declined to give the value of the deal.

Delivery of the planes in the contract will start in 2010. (Reuters)

Tourism acting on climate and poverty imperatives

The tourism sector has the potential to act effectively on the evolving common agenda of climate change response and the fight against poverty. UNWTO put forward this message during the thematic debate "Addressing Climate Change: The United Nations and the World at Work", at UN Headquarters in New York.

“This is the message that we took to the UN Conference on Climate Change in Bali. It fits into the road map laid out by Secretary-General Ban Ki-moon for the broader UN System Agenda. UNWTO’s position has evolved through a comprehensive preparation which started back in 2003 with a shared vision of three Agencies - UNWTO representing tourism, the United Nations Environment Programme representing environment and the World Metereological Organization representing science that we will need to act comprehensively on this issue. Throughout last year we brought together all the key Tourism players to draw up guidelines for a more climate conscious future and to support the MDGs”, said UNWTO’s Secretary-General, Francesco Frangialli. “The resultant “Davos Declaration Framework” gives us both principles and new directions for the task ahead.”

Throughout 2008 UNWTO will campaign for a constructive approach by the tourism industry – public, private and civil society – calling on them to work together to support the Davos Declaration Framework to help transform the sector to meet the climate and poverty imperatives. “Tourism Responding to the Challenges of Climate Change” has been designated as the theme for this year’s World Tourism Day, celebrated every September 27 around the world.

Tourism is one of the main services exports with a strong comparative advantage in the world’s poorest and emerging countries. These are markets that are growing at twice the rate of industrialized countries. At the same time our product is tied to climate and like other sectors we are green house gas contributors. Responsible growth patterns must now address economic, social, environmental and climate sustainability.

“This is the quadruple bottom line challenge which is at the heart of our campaign” according to UNWTO Assistant Secretary-General Professor Geoffrey Lipman who addressed the Assembly Session. “UNWTO will mobilize its more than 150 Member States and its Affiliate Members in the private, academic and destination communities, representing a network of thousands around the world in an effort to raise awareness of the magnitude of the challenge and contribute to the global response.”

Airport privatisation and environment: two leadership challenges for Japan

The International Air Transport Association (IATA) delivered two leadership challenges to Japan: (1) to make the privatisation of Japan’s airports an example of global best practice and (2) to champion efforts towards a zero carbon emission industry at the upcoming G-8 Summit to be held in Japan.

Giovanni Bisignani, IATA’s Director General and CEO raised the challenges in a keynote speech hosted by the international business community in Japan.

Airport Privatisation

Amid the debate in Japan on caps for foreign ownership of Japan’s privatised airport assets, Bisignani said, “I don’t care who owns the airport. That is for politicians to decide. For the economy, an airport is important for what it delivers.”

Bisignani noted that airport performance is measured in three key areas. “Airports must deliver adequate capacity to ensure that markets are well served. They must ensure service levels that meet customer expectations. And they must do that at prices that reflect efficiency. It is not rocket science. It is just good business,” said Bisignani.

“Providing the right incentives is the most critical part of the privatisation process. We have seen too many privatisations fail because governments sold the crown jewels without appropriate guidance and incentives for the new owners. Effective and transparent economic regulation is in the interest of everybody, including the potential new owners. They will want to clearly understand what they are buying and what the expectations are. I look forward to working with the MLIT and the airports to ensure that the world’s largest airport privatisation to date will also be the most successful,” said Bisignani.

Environment

Aviation is 2% of global carbon emissions. IATA has aligned the industry with a four pillar strategy to address climate change: (1) invest in new technology, (2) fly planes effectively, (3) build and operate efficient infrastructure and (4) call for positive economic incentives to encourage improved fuel efficiency and a reduction in CO2 emissions. This strategy, along with a target to improve fuel efficiency 25% by 2020, was endorsed by the States of the International Civil Aviation Organization at their Assembly in September 2007.

“Now it is time for results,” said Bisignani. “Japan’s plans to implement performance based navigation systems at its top 20 airports by 2012 will reduce fuel burn by 2% and save 162,000 tonnes of CO2 annually. This is a great example of our strategy at work.”

In June 2007, IATA put forward a vision for air transport to achieve carbon neutral growth, leading to a zero carbon emission industry. “As the host of this year’s G-8 Summit, Japan must take a leadership role in the climate change debate. I encourage the Japanese government to push the G-8 leaders to aim high and build the political will to achieve a zero emission industry. We went from the Wright Brothers to the jet age in 50 years. If government and industry are aligned, I am convinced that together we can turn dreams into reality,” said Bisignani.

Thomas Cook trading for winter and summer 08 continues steady growth

Thomas Cook trading for winter 07/08 and summer 08 continues to be encouraging and "we are in a strong position for the rest of the year", as the tour operator stated. The Board continues to look to the future with confidence. In the short term, the company is encouraged by the business’s performance since the year end and ongoing current trading.

"In the longer term, merger synergies of at least €200m provide a sound platform for the achievement of our target of at least €620m operating profit in 2009/10," said Thomas Cook.

Financial Performance

The unaudited Group operating loss before exceptional items and amortisation of business combination intangibles in the two months to December 2007 was reduced by €39.6m, or 27%, to €106.8m (2006 pro forma loss: €146.4m). The result for this period is in line with the company's expectations and reflects the seasonality of its business.

The improved Group operating result reflects costs savings and improvements in underlying margins, partially offset by increased costs of fuel. Significant year on year improvements were seen in the UK and Continental Europe with smaller improvements reported in Airlines Germany and North America. Northern Europe continued to perform strongly, in line with the prior year. Corporate costs were broadly flat year on year.

The improvement in the UK reflects cost savings achieved through the integration process. In Continental Europe, the company has seen a strong start to the year in Germany, with improvements in margins achieved and lower overhead costs than in the prior year.

In Airlines Germany, increased volumes in third party and seat only business have resulted in improved margins year on year. In North America, Thomas Cook has also achieved improved margins despite the continuing difficult trading conditions in Canada.

Operating exceptional items in the period were €9.9m, and largely reflect the continued integration of the UK businesses. Amortisation of business combination intangibles amounted to €14.9m.

Acquisition of hotels4U.com

The Group also announced that it has agreed to acquire the entire issued share capital of hotels4U.com Limited from Centurion Holiday Group Limited. The initial consideration, net of amounts to be reinvested by Haim Perry, MD of hotels4U and Jacky Bedlow, Finance Director, is £21.8 million payable in cash from internal resources. The management’s reinvestment is subject to earn out arrangements based on the profitability of hotels4U up to 2013.

Austrian resumes service to Erbil

Three flights a week to Iraq from 2 April onwards, four flights a week from June.

For Austrian Airlines, the highest priority at all times is the safety of the passengers and employees of the company. Additional improvements for more security have been implemented during the last months together with the local authorities.

Having conducted a detailed examination of conditions in Iraq, and based on the security situation as it stands at present, Austrian Airlines will resume flights to Erbil from 2 April 2008 onwards. The situation in the region is still being continuously monitored in cooperation with the security authorities, enabling the company to act without delay in the event of any irregularities or changes in the situation.

Three flights a week (on Mondays, Wednesdays and Fridays) are planned for April and May and four a week (including Sunday) from June onwards. As a result, a direct service to Erbil will be reincorporated into the Austrian route network, opening up numerous new connecting flights for passengers.

Austrian Airlines was the first European airline to receive landing rights in Iraq. The route to Erbil, which was opened up on 11 December 2006, developed extremely positively.

Due to the strong demand at the time, it proved possible to expand the service from two connections a week at first to four connections a week. The flights had to be temporarily removed from the schedule from 24 August 2007 onwards following a reevaluation of the security situation.

From end-September 2008 onwards, the new Premium Service, in which the Business Class sections of four Airbus A320 will be equipped with 24 Business Sleeper Seats by Recaro, will also begin operating on the route to Erbil.

Features of the new service including 116 cm of legroom between seats, a pleasant angle of recline, electronically adjustable back- and footrests and an integrated massage function are guaranteed to provide relaxing travel conditions.

CAAS awards contract for upgrading of Changi Airport T1

The Civil Aviation Authority of Singapore (CAAS) has awarded the tender for the project to upgrade Singapore Changi Airport’s Terminal 1 to Takenaka Corporation. The upgrading works will commence in May 2008 and are scheduled to be completed in 2011. The works, at an estimated project cost of about $500 million, will rejuvenate the 27-yearold terminal and enhance the passenger experience at Changi Airport.

The concept for Terminal 1’s face lift is “Tropical City”. Works will refurbish the terminal’s interior design and finishes, as well as improve passenger flow at key areas. Areas to be upgraded include the exterior façade, Departure Kerbside, Departure Checkin Hall, Departure Transit Mall and Arrival Hall.

In line with the theme, the architectural and interior design will create a warm and familiar feeling for travellers. Landscaping will be integrated with the interior design to maintain the original warmth and welcoming ambience of the terminal.

On top of enhancing the aesthetics of the terminal, the processing capacity of key areas, such as the Departure Check-in Hall, will be improved. Older sections of the finger piers will be expanded and seating in the gate holdrooms enhanced.

As part of Terminal 1’s upgrading works, services and facilities offered will be improved. The building will also be expanded to allow for the provision of new passenger facilities while expanding the retail and F&B offering.

Director-General and Chief Executive Officer, CAAS, Mr Lim Kim Choon, said, “Many of us have fond memories of Terminal 1, which is synonymous with the birth of Changi Airport in 1981. It is timely for our grand old dame to get a refreshing makeover.”

He added, “Terminal 1’s upgrading is part of our infrastructure upgrade plans. With the recently renovated Terminal 2 and newly opened Terminal 3, Terminal 1’s face lift will ensure that all passengers at Changi Airport can enjoy the same exciting, vibrant and enjoyable Changi Experience.”

Changi Airport started operations with Terminal 1 in 1981.

ITB Berlin focuses on travel e-business

Following the successful launch of Travdex@ITB in 2006 and PhoCusWright@ITB in 2007, Messe Berlin will offer, for the third year running, another information-packed technology programme in the context of the ITB Convention from the renowned market research and travel intelligence company, PhoCusWright Inc.

“The ongoing potential and impact of technology on global travel distribution is so significant,” says Michaela Papenhoff, Managing Director PhoCusWright in Europe, “that this year’s PhoCusWright@ITB is being dedicated to a confluence of forces: technology and business.”

A collection of keynotes, talkback round tables, case studies, executive interviews, ‘Five Minutes of Fame’ presentations, and points/counterpoints will cover essential trends and in-depth insights that surround the theme ‘Success in Travel E-Business’. “Getting technology right is mission critical to travel, tourism and hospitality success,” says Papenhoff.

With this novel, highly focused concept, PhoCusWright@ITB will take place from 5-6 March in Hall 7.1b, Auditorium London 3. The first ever PhoCusWright Bloggers Summit is scheduled for 5 March, while Thursday 6 March will be devoted entirely to the Success in Travel E-Business programme, from 10.15-18.15.

Online Travel Agency (OTA) leaders speak out

The conference kicks off with a candid Executive Roundtable involving the CEOs or similar high-level executives of some of the world’s leading OTAs – such as Opodo, Expedia, ebookers.com, eDreams and lastminute.com – moderated by Philip C. Wolf, President and CEO of PhoCusWright.

Discussions are focused on changing OTA business models, as well as transaction commissions and merchant fees, which are being challenged by a recently introduced ‘pay per click’ model. Industry leaders will share their points of view on these and other critical issues.

Another conference highlight will be Philip Wolf’s one-on-one interview with industry veteran, José Antonio Tazón, President and CEO of the global distribution system (GDS), Amadeus IT Group S.A. Tazón will share his two decades of experience at the helm of Amadeus, and his vision for the future, as well as talking about the success strategies adopted by Amadeus through changing times to ensure that the GDS maintains its former success in the global travel marketplace.

Re-inventing the holiday booking

Also generating widespread interest is the session on holiday travel, which will be preceded by a keynote presentation by John Kohlsaat, Regional General Manager, easyJet Airline Company. The low-cost carrier has entered the holiday market with easyJet Holidays, so the group’s strategies will be of particular relevance to other tour operators, representing industry peers such as TUI Travel, which will be participating in the ensuing panel discussions.

Among the other conference highlights, delegates will be able to compare and contrast travel strategies of Google and Yahoo, learn more about the evolution of metasearch and how it can influence their businesses, listen to experts talking about the implications of Travel 2.0 and 3.0, and gain insight about next-generation mobile travel applications. Travel industry start-up CEOs will also present executive summaries of their compelling business cases in sessions entitled: Five Minutes of Fame.

“The importance of this rich programme is that it calls for speakers to explain travel technology in business terms, for business people,” says Papenhoff. “Sales, marketing and business development professionals in the travel, tourism and hospitality industry will learn how to leverage technology developments for revenue gains, margin improvements and operational efficiencies.”

“The conference theme, Success in Travel E-Business, makes travel technology relevant for everybody!” says Papenhoff.