DATUK SERI TONY FERNANDES
AirAsia Bhd
Group CEO
I AM thrilled about the Mass Rapid Transit (MRT) in Greater KL. This is something long overdue. People do not realise the significant loss in productivity to be sitting in traffic jams. Hopefully, with the MRT, this problem will be alleviated.
It is critical to cover the whole of KL and I hope that the railways will continue to be developed. It would be fantastic if KTM is linked to KL International Airport as that could spur tourism along the entire KTM network stretching from north to south. Along the way, there are many tourism projects and the linkages can only benefit the rural economy tremendously.
I am happy that talent is being put to the forefront. We should try to bring back our talent from abroad. For that to happen, we must be prepared to compete with the best in the world.
Friday, October 15, 2010
Wednesday, October 13, 2010
Airline Industry Into Better Times
Surge in US airline passenger loads require pilots
Malaysia Sun
Wednesday 13th October, 2010
US pilots, who have been out of work, sometimes for many months, are about to find themselves back in the chair.
US pilots, who have been out of work, sometimes for many months, are about to find themselves back in the chair.
A passenger surge by Delta and AirTran has foreshadowed mass pilot hirings by the airline industry.
Delta and AirTran, which began recruiting again earlier this year, found that there were many pilots willing to step out of unemployment lines.
AirTran claimed it had received more than 3,000 applications when it started hiring pilots again in February.
Analysts in the US have suggested the oversupply of pilots is temporary with the industry now looking for experienced staff.
Delta announced plans to hire about 300 pilots this year, while AirTran said it would take in about 160 new staff.
Malaysia Sun
Wednesday 13th October, 2010
US pilots, who have been out of work, sometimes for many months, are about to find themselves back in the chair.
US pilots, who have been out of work, sometimes for many months, are about to find themselves back in the chair.
A passenger surge by Delta and AirTran has foreshadowed mass pilot hirings by the airline industry.
Delta and AirTran, which began recruiting again earlier this year, found that there were many pilots willing to step out of unemployment lines.
AirTran claimed it had received more than 3,000 applications when it started hiring pilots again in February.
Analysts in the US have suggested the oversupply of pilots is temporary with the industry now looking for experienced staff.
Delta announced plans to hire about 300 pilots this year, while AirTran said it would take in about 160 new staff.
Road Transport Bill
KUALA LUMPUR: The Road Transport (Amendment) Bill 2010, which was earlier revoked, was again tabled for second reading at the Dewan Rakyat on Wednesday, Oct 13.
Transport Minister Datuk Seri Kong Cho Ha said the bill was tabled again after the ministry had updated the suggestions submitted following feedback received from various quarters including the Barisan Nasional Backbenchers Club (BNBBC).
Kong said the bill originally involved 63 sections and sub-sections of which 31 had been accepted without objection while the rest received feedback from various quarters.
"In updating the Road Transport Act 1987 (Act 333), the government had studied and considered the views received in the interest of the people, four proposed amendments (from the previous bill) are among those that had been dropped," he said in a statement here.
The four proposed amendments that had been dropped were the increase in the age limit for applicants of a motorcycle licence from 16 to 17 years old, the maximum compound raised from RM300 to RM1,000, the three-month validity period for a Motor Vehicle Licence (LKM) for repeat offenders, and the control on the issuance of vehicle registration number plates by the Director-General of the Road Transport Department.
On April 21, the government retracted the bill which was tabled for the first reading which contained 51 Articles proposed for amendments.
Deputy Transport Minister Datuk Rahim Bakri tabled the bill which contained 47 Articles. — Bernama
Transport Minister Datuk Seri Kong Cho Ha said the bill was tabled again after the ministry had updated the suggestions submitted following feedback received from various quarters including the Barisan Nasional Backbenchers Club (BNBBC).
Kong said the bill originally involved 63 sections and sub-sections of which 31 had been accepted without objection while the rest received feedback from various quarters.
"In updating the Road Transport Act 1987 (Act 333), the government had studied and considered the views received in the interest of the people, four proposed amendments (from the previous bill) are among those that had been dropped," he said in a statement here.
The four proposed amendments that had been dropped were the increase in the age limit for applicants of a motorcycle licence from 16 to 17 years old, the maximum compound raised from RM300 to RM1,000, the three-month validity period for a Motor Vehicle Licence (LKM) for repeat offenders, and the control on the issuance of vehicle registration number plates by the Director-General of the Road Transport Department.
On April 21, the government retracted the bill which was tabled for the first reading which contained 51 Articles proposed for amendments.
Deputy Transport Minister Datuk Rahim Bakri tabled the bill which contained 47 Articles. — Bernama
Friday, July 9, 2010
PORT NEWS AROUND THE WORLD
| Sri Lanka port terminal concession finalised A deal to build a container terminal in an expanded Colombo port will be awarded to a China-Sri Lanka consortium within 'two to three weeks' according to Treasury Secretary P B Jayasundera, Lanka Business Online reported. "Right now we are about to issue an LOI (letter of intent) on the development for Colombo port," Jayasundera said. "The concession agreement has been finalised." Sri Lanka Ports Authority has been haggling with the sole bidder to raise royalties paid under the concession agreement for the last year. A team from China Merchant Holding is now in the country and awaiting legal clearance of the concession agreement, sources close to the deal said. Jayasundera told LBO the deal is likely to be awarded within two to three weeks. Analysts say terminal is likely to cost around US$500 million. The government itself is investing around $380 million to build a breakwater and expand Colombo port, which straddles an East-West shipping lane across the Indian Ocean. The expanded breakwater has space for multiple terminals which can be built over several years. |
Wednesday, March 3, 2010
Seaports - more TEU's for Wesport in 2010
Westports expects to handle more TEUs this year
Westports Malaysia expects the terminal to handle 5.2 million TEUs this year, up from 4.5 million last year, said its executive chairman G. Gnanalingam.
He said the last few months has seen a growth in shipments on the back of the recovery of regional economies, reported Reuters.
"We have reached a big inflexion point in terms of shipping and this has been seen in our manpower (needs)," he said.
Westports recorded five million TEUs, the standard measurement for shipping containers, in 2008.
At the height of the crisis last year, shipping lines in general suffered losses totalling US$20 billion as the world shipping volume dropped by 25 per cent while capacity increased by 35 per cent.
Gnanalingam described undercutting as one of the main reasons as shipping lines grappled with excess capacity.
He said the shipping scene is likely to continue to see changes with more consolidation among the players.
For instance, Maersk stands strongly due to merger exercise compared to a decade ago when the shipping scene was dominated by Maersk and Sealand and P&O and Nedlloyd.
A decade ago there were 100 shipping lines and the number is expected to shrink by half within this year.
In terms of growth this year, Gnanalingam said the main drivers would be China, India and the Middle East, markets that will benefit from Malaysia's exports. This would be followed by Australia and South America before Europe kicks in.
Westports Malaysia expects the terminal to handle 5.2 million TEUs this year, up from 4.5 million last year, said its executive chairman G. Gnanalingam.
He said the last few months has seen a growth in shipments on the back of the recovery of regional economies, reported Reuters.
"We have reached a big inflexion point in terms of shipping and this has been seen in our manpower (needs)," he said.
Westports recorded five million TEUs, the standard measurement for shipping containers, in 2008.
At the height of the crisis last year, shipping lines in general suffered losses totalling US$20 billion as the world shipping volume dropped by 25 per cent while capacity increased by 35 per cent.
Gnanalingam described undercutting as one of the main reasons as shipping lines grappled with excess capacity.
He said the shipping scene is likely to continue to see changes with more consolidation among the players.
For instance, Maersk stands strongly due to merger exercise compared to a decade ago when the shipping scene was dominated by Maersk and Sealand and P&O and Nedlloyd.
A decade ago there were 100 shipping lines and the number is expected to shrink by half within this year.
In terms of growth this year, Gnanalingam said the main drivers would be China, India and the Middle East, markets that will benefit from Malaysia's exports. This would be followed by Australia and South America before Europe kicks in.
Thursday, February 25, 2010
Whats the fuss over Hambantota Port of Sri Lanka - a lesson to be learnt
Hambantota port, gateway to world
For centuries Sri Lanka was famous for the export of tea, rubber, gems and many other items. However, only less than one percent of the population may know that centuries ago, the then Ceylon exported metal to Rome, Europe, Arab and other developed countries mainly to manufacture armour, including swords.In a rocky area in Samanalawewa, near Embilitpitiya a mistrial furnace powered by strong monsoon winds was built. Field trials using replica furnaces confirm that this furnace-type used a wind-based air-supply principle that is distinct from either forced or natural draught and can produce high-carbon steel. This technology sustained a major industry in this area during the first millennium AD.
The metal produced here was exported there was a time when ships sailed to Hambantota. (Sadly today Sri Lanka is spending millions of rupees to import steel.)
Constantinople was the trading point that linked China with Europe and it took almost two and a half years to transport goods along the Silk route overland. However, due to the conflicts between countries over the Silk Route, alternative routes had to be found to connect ancient Alexandria with China.
Then the Chinese and the Arab’s selected Hambantota in the centre of the former Maritime Silk Route around 250 BC for sea transportation.
 The International Monetary Fund Mission Chief to Sri Lanka, Dr. Brian Aitkin with Chairman Ports Authority, Dr. Priyath Wickrama, Deputy Chief Engineer, Sri Lanka Ports Authority, Agil Hewageegana and Chinese officials inspecting the progress of the Hambantota Port. |
Even today this sea route is operational with 36,000 ships passing Hambantota annually.
China, Korea and Japan are some of the highest oil consuming nations in the world with Crude oil from the Gulf and 4,500 tankers sail each year on the same route. Singapore is among the best three Ports in the World with over 5,000 ship companies. This caters to 4,500 oil tankers from Dubai and over 100,000 other vessels that anchor in Singapore.
These large ships, however, had to do a de route of three-and-a-half days to Singapore and also to India, Thailand, and Malaysian harbours for refuelling, buying provisions medical supplies and other essentials. However, the Colombo Port due to its location and limited capacity was never on this map of those tankers and other ships which sail close to Sri Lanka.
When the Hambantota Port is completed ships could save nearly three days sailing of time, fuel and enjoy numerous benefits by anchoring at Hambantota. It is envisaged that many of the 4,500 oil tankers would anchor in Hambantota for bunkering, ship repairing, and to purchase food, water and medical supplies and logistics.
It is expected that at least 20 percent of the shipping traffic mainly the oil tankers would call over at the Hambantota Port.
The neighbouring countries have suddenly realised that the Hambantota project is now a reality. Hence these countries are now taking precautions to keep the ships sailing to their harbours and keep the ship companies in their countries.
Thailand has launched several ambitious projects similar to India’s stalled Sethu Samudram project to woo these ships and Malaysia too is exploring feasibility of planing a new sea route.
However, these would take a long time to materialise and by that time Hambantota would be one of the busiest harbours in the region.
Project ignored for three decades
 Work in progress at the Quay wall in dry conditions |
 The metal crushing plant |
However, no government or a political leader had the vision to go ahead with the implementation of the project.
Even under the Southern Development Authority set up in 1977 the Hambantota Port project proposal was confined only to words and proposals. The proposal was only limited to feasibility studies again and again with budgets running into millions but to no avail.
There was one individual, a shipping industry-lover Ariya Wickramanayake of Master Divers who did a study with his own funds and presented it to President Mahinda Rajapaksa, then a Minister.
Rajapaksa who already knew the importance of the project presented this study project and several other proposals on the construction of the Port to the then leaders of the Country. Various excuses were trotted out and the project never got off the ground.
Rajapaksa as soon as he was elected President got the project moving and most importantly wooed the Chinese leaders for funds which too was not possible before making the project a reality.
First ship to anchor in December
According to the Chairman of the Ports Authority, Priyath Wickrama, the first stage of the Hambantota Port Development is to be completed by the end of this year which is ahead of schedule. The total cost for the project is US$ 360 million.Sri Lankan engineers and their Chinese counterparts from the China Harbour Engineering Company and Sinohydro Corporation are using maximum resources within the locality. Steps are also being taken to wash sea sand and use it for construction.
The 600 metre long jetty is now nearing completion and the depth of the basin would be 17 metres. In the Colombo harbour the depth is only 15.5 metres. The turning circle would be 600 metres and the breakwater would be 1450 metres.
One of the biggest advantages of the Port site is the 22 metre depth to the mouth of the harbour, a unique geographical feature which even the Indian Ports could not match.
Unique business opportunities
The business opportunities from the project locally and internationally will definitely trickle down to the masses with over 50,000 indirect employment opportunities being created.A cement grinding and bagging plant would be set up along with fertiliser bagging plants.
Warehousing and offshore services too would create wealth to the area. The operation of an LP gas terminal for the first time in the country would create two tiers of pricing with the Southerners expected to receive LP gas at reduced prices due to low taxes and overheads.
The bunkering facility and the Tank Farm project too have commenced bringing more benefits to the country. The bunkering facility will comprise 14 tanks. Eight tanks will be used to provide oil for ships and aviation fuel while three will be used to store LP gas.
In a few years the Hambantota district per capita income is expected to be on par with the districts in the Western Province, which would be an achievement.
The US$ 600 million funds needed to launch the second project to be completed in 2014 too are expected to be found again with Chinese assistance. Under the third phase of development a Dockyard too would be constructed.
World accolades for Hambantota
Hambantota Port also holds several unique world achievements which Sri Lanka can be proud of.The Port would be the world’s biggest harbour constructed on land in this century.
When completed the Hambantota harbour on 4,000 areas of land could accommodate 33 vessels to berth at any given time after completion, which would make it the biggest harbour in South Asia.
The proposed 15-storey administrative complex for the Port which could even withstand a tsunami would also be one of the best designed shipping structures in the SAARC region.
The port of Rotterdam from 1962-2004 was the world’s busiest ports until it was surpassed by Shanghai. It had higher volumes than the Singapore port. China’s Shanghai overtook Hong Kong to become the world’s second largest container port.
It is also the only harbour in the World where shippers could witness peacock and deer roaming freely in the 4,000 acre land as great care was taken to safeguard the environment.
Hambantota too is in line to be listed among the world’s busiest harbours and this would make Sri Lanka proud, a small country which was recently is elevated to a middle income country.
Sunday, February 21, 2010
Malaysia - Shipping Outlook
Wednesday, February 3, 2010
Signs of recovery in container shipping but industry players are cautiously optimistic of 2010
Container shipping, the worst-hit shipping segment in the global economic downturn last year, is showing signs of recovery but industry players are being cautiously optimistic.
Maersk Line, the world’s largest liner company, sees an uphill climb for the industry this year.
Maersk Malaysia Sdn Bhd managing director Omar Shamsie told StarBiz that container shipping had seen significant value destruction last year and it must be prepared for an uphill climb this year.
“Last year, many shipping companies had postponed existing orders for new vessels, idled existing vessels and increased their scrapping programmes,” he said.
“All these in an effort to take the cost out and better match capacity to the prevailing demand where these combined actions had resulted in a larger-than-expected impact on vessel fleet growth and helped create tighter capacity.
“We expect this situation to continue in 2010 and this in turn will help increase rates further. But, although freight rates have increased in the last four to five months, they are still at a historic low level, and it will be a while before they reach a stage of sustainable returns,” Omar said.
Global markets are showing signs of recovery, but the outlook for the shipping market is still uncertain, according to Omar.
“We believe there is a positive momentum for growth due to a pick up in demand and efforts to curb capacity increases, but it will be a modest growth rate compared to an industry yearly average of 10% in the last 30 years.
“It will be a while more before traditional consumer markets like the US and Europe return to their former strength, and this will contribute to the modest growth rates we expect in the near future in container volumes,” he said.
The shipping industry went through what had been described as its worst period in the post containerised era with the highest number of ships laid idle at the height of the global economic downturn last year.
In November 2008, freight rates in the Asia-Europe trade were slashed by more than 50% compared with the previous year and major shipping companies took evasive measures by cutting down on capacity and consolidating services.
In the same month that year, Singapore-based Neptune Orient Lines (NOL) disclosed that its shipping unit, APL, would reduce its capacity in the Asia-Europe trade by about 25% and by around 20% for its trans-Pacific trade.
Maersk Line had then also cut back on its Asia-Northern Europe network, resulting in a temporary removal of its AE8 service in November 2008.
And in the middle of last year, MISC Bhd announced its withdrawal from Grand Alliance, the world’s largest container shipping alliance effective Jan 1 this year.
Drewry Shipping Consultants Ltd believes that the industry has seen the worst of the global recession, but has forecast a very cautious recovery this year with the global container traffic expected to increase by 3.4%.
It said that rising container freight rates on many routes should not fool the industry into thinking that there was a full-scale recovery going on.
“This year will continue to be a very challenging one for all major stakeholders, even if we appear to have seen off the worst of this awful trade trough,” Drewry said.
Drewry Container Forecaster editor Neil Dekker said several large container operators would have “gone to the wall” in 2009 if major benefactors or governments had not stepped in to bail them out.
“There is a strong argument for thinking that if a major carrier had been allowed to fail, the market would have had a much better opportunity to correct itself and lay the foundations for a more profitable industry in the long term.
“A fairly large chunk of capacity would have been taken out of the market, allowing load factors and freight rates to improve,” he said in statement.
Dekker said even if the industry could secure the same amount of fresh cash in 2010 as it received from shareholders last year, it would not be sufficient to cover its needs.
“Another estimated US$1.4bil of cash may need to be found from other sources to keep the carriers trading. This may then prove to be the catalyst that leads operators to start selling assets – such as their terminals,” he said.
source: the star
Wednesday, February 17, 2010
Indian Shipping Industry Outlook
| Gloomy outlook for Indian shipping industry |
"Demand for Indian shipping is going to remain subdued in 2010 and 2011 due to the decline in overall global trade volumes," said the report.
Long-term charter contracts have reduced volatility to some extent, and provide some revenue visibility. And with the fall and rise in volatility of the charter rates, shipping companies now prefer long-term contracts to hedge risk. Companies with long-term contracts have been shielded to some extent from the sharp decline. However, these contracts generally have a tenor of around one year, and it is likely that charter rates will see some reduction upon renewal.
In the year ahead, shipping industry will need to line up further capex as about half of the cargo ships under the Indian flag are to be phased out in 2010, due to the International Maritime Organisation's (IMO) directive to replace single-hull ships with double-hulls. This coupled with older age of ships is a major factor contributing to the necessity for further capex this year.
However, most of the Indian companies have limited room to purchase new vessels, due to the lack of availability of funds and the reluctance of banks to lend to this sector.
"Order cancellations and postponements, and the phasing-out of single-hull vessels, have to some extent staggered the availability of excess capacity, but the global shipping market is bound to face excess supply over the medium term," explained Fitch in its report.
Sunday, February 14, 2010
AIR ASIA FORAY INTO INDIA
Forbes India
In Full Flight
Cuckoo Paul, 02.08.10, 06:00 PM ESTTony Fernandes, the feisty owner of AirAsia, has focused his sights on India. Making his no-frills model work here won't be easy.
The Genghis Khan of air travel in Asia has arrived. This guy is known to do to fares what the Mongolian warrior legend did to traitors' heads: Chop them. His slash-and-burn has already begun. His airline AirAsia is offering a return ticket to Malaysia from Indian cities for less than Rs. 10,000, half the price that everyone else is charging. "At these prices, demand is a no-brainer. Full-service airlines like Malaysia Airlines, Jet Airways and Thai stand no chance," says Madhav Oza, director of Blue Star Travels, one of the country's largest travel companies.
Say hello to Tony Fernandes, the 46-year-old Malaysian entrepreneur of Indian origin who turned a tottering airline into Asia's most successful low-cost carrier. Coming off a three-year campaign in China, Fernandes declares rather gleefully that 2010 will be his "India year." He is bringing frightful commitment to his Indian campaign. "It is easy to roll over and play dead. We plan to stay and fight. In India there hasn't been anyone who has done this," he says.
The Indian market is second only to China in growth. Singapore, Malaysia and Thailand are top-of-the-charts holiday spots for Indians, and everyone loves a good deal. Over the next year he plans to ferry 2 million passengers--many of them first-time air travelers--to India and back on about 148 weekly flights.Why India?
Fifteen months ago AirAsia began operating on the fringes of the Indian market, connecting Malaysia to Kolkata, Trichy, Kochi and Trivandrum. But starting at the end of April, it will up the ante. The airline plans to gradually link New Delhi, Chennai, Bangalore, Hyderabad and Mumbai to Kuala Lumpur and Penang and from there to over 130 routes.
There is also an emotional reason why Fernandes is keen on India. His family hails from Goa. "My dad would have been over the moon to see AirAsia connect to India," he says, "If I can't make it work here, I might as well pack up and go back to the music business."
That's the other thing you should know about Fernandes. He had no experience in airlines till nine years ago. Fernandes ran a music business when he was introduced to the wily Malaysian prime minister Mahathir Mohamad in 2001. Mohamad persuaded Fernandes to buy out his government's stake in the struggling Air Asia for just one ringgit. It was a terrible time for a new entrepreneur to step in. The global aviation industry was in a complete funk after the terror attacks of Sept. 11. Passenger traffic was at an alltime low. But Fernandes not only turned around AirAsia, paying off all the debts, he even figured out a way to go one up on his role model, the Irish airline Ryanair, till then considered to be the best low-cost airline in the world. At $3.21 per available seat kilometer, AirAsia's costs are today the lowest in the world. Since then AirAsia has consistently expanded its network in the Asia-Pacific region, making it the region's biggest low-cost carrier and developing a formidable reputation for management innovation. And Fernandes, with his bright red baseball cap, is now a Malaysian icon and a formidable adversary.
Back home Fernandes had to go through a similar tussle with Malaysian Airports, the operator of the KL airport (incidentally, a partner in the Hyderabad airport). He has called the airport operators 'parasites' and resents not being allowed to build and operate his own terminal near the capital city. "Low-cost airlines drive up passenger numbers and nonaeronautical revenues through shopping, food and other income, and can be a massive earner,'' he says. The Indian airports are not being very smart. "They look at the airlines as cash tills.''Turbulence Expected
His Indian adventure though, won't be smooth sailing--something that Fernandes has already begun to realize. To make his low-cost model work, Fernandes needs airport operators--which include the government-owned ones--to play ball. For nearly three years AirAsia has been negotiating with the Airport Authority of India and private firms that run airports in Mumbai, Delhi, Bangalore and Hyderabad for better terms compared to the network carriers. But he's had little success. They aren't willing to make any special allowances for him. Both ground handling charges and security costs remain very high. "Both the government and private Indian airports have not woken up yet. The high airport costs are one reason why no low-cost carrier has done well in India,'' he says.
Add the growing congestion in major airports like Mumbai, which will mean burning more expensive fuel. The legendary 25-minute turnarounds, that help the airline flog its planes for up to 13 hours daily, look tough at the large airports here.
So if the costs are the same for every airline, be it full-service or low-cost, the question that aviation watchers are asking: How will AirAsia sustain their aggressive pricing? This is something that even lowcost evangelist Captain G.R. Gopinath found tough. "Tony Fernandes is a brilliant guy and has lower costs than others,'' said Gopinath. "In India airlines have formed a cartel, and no one is willing to break. AirAsia and Tony are not afraid to rock the boat--they have done it in the rest of the world," he says.
Smoking Aces
Call it tsunami marketing. That's how Kathleen Tan, who heads the airline's commercial operations in India, describes their approach. "We do not believe in half measures," she says. AirAsia group's entry into India will be through three separate companies--a strategy never tried by any other airline before. The Government of India clearances weren't easy but are now finally in place. The Sepang-based parent AirAsia Bhd will start flights from Kuala Lumpur to Hyderabad, Banglore and Chennai in stages this year. This is in addition to Trichy, Kolkata, Kochi and Thiruvananthapuram, which are already connected. Thai AirAsia (a joint venture with Shin Corp) will start with flights from Bangkok to four points in India later this year. This will open up Phuket, Krabi and nine other points in Thailand to passengers from India, who can connect to them from the AirAsia Bangkok hub. The third company, the group's long-haul airline AirAsia X (a venture with the Virgin group), will start flying to Mumbai and Delhi by the middle of the year with bigger A330 planes.
Call it tsunami marketing. That's how Kathleen Tan, who heads the airline's commercial operations in India, describes their approach. "We do not believe in half measures," she says. AirAsia group's entry into India will be through three separate companies--a strategy never tried by any other airline before. The Government of India clearances weren't easy but are now finally in place. The Sepang-based parent AirAsia Bhd will start flights from Kuala Lumpur to Hyderabad, Banglore and Chennai in stages this year. This is in addition to Trichy, Kolkata, Kochi and Thiruvananthapuram, which are already connected. Thai AirAsia (a joint venture with Shin Corp) will start with flights from Bangkok to four points in India later this year. This will open up Phuket, Krabi and nine other points in Thailand to passengers from India, who can connect to them from the AirAsia Bangkok hub. The third company, the group's long-haul airline AirAsia X (a venture with the Virgin group), will start flying to Mumbai and Delhi by the middle of the year with bigger A330 planes.
The plan has been carefully laid out and banks on rapid expansion and improved frequencies over the next few years. "When the India flights were announced this week, we started marketing them in India and began promoting them in Singapore, Jakarta, Melbourne and China," she says. She recently met an Indian entrepreneur on the flight from Kolkata to Kuala Lumpur, who says he can now connect to China much more easily. The journey via Delhi would have taken him two days. Tan is also leading the move to transactions on the Internet, cutting out travel agents from the picture. "We have to be disciplined. I know the agent community in India is very strong, but there is no way we will sell them tickets cheaper than to the passenger," she says. Red tape and government-owned airlines and airports are an obstacle in most markets. "But we are like pit bulls. We will keep at it, until we get our way," she adds.
Fernandes says he will depend on the culture of innovation in AirAsia. The company has a very flat organization. No one has any titles. "Unlike most Asian companies, we have controlled anarchy in AirAsia. I'd rather have 6,000 brains working for me than just 10,'' he says.
Beyond Selling Tickets
AirAsia has been able to increase ancillary revenues, much beyond Indian low-cost carriers. Revenue coming from hotels (it has its own chain), baggage, food sale and on-board duty-free sales, accounted for 20% of the airline's sales in the last quarter of 2009. AirAsia has a policy of no fuel surcharge on its tickets, but all checked baggage is charged. In India passengers can buy this space for bags of up to 15 kg at Rs. 450, with prices going up with the weight. They can also buy blankets and pillows. A Malaysian Nasi Lemak or a smoky, barbeque chicken meal is priced at Rs. 150. Meals have to be paid for even in the premium economy section of AirAsia X. The premium seat, with a fully flat bed is available at roughly three times the economy ticket.
AirAsia has been able to increase ancillary revenues, much beyond Indian low-cost carriers. Revenue coming from hotels (it has its own chain), baggage, food sale and on-board duty-free sales, accounted for 20% of the airline's sales in the last quarter of 2009. AirAsia has a policy of no fuel surcharge on its tickets, but all checked baggage is charged. In India passengers can buy this space for bags of up to 15 kg at Rs. 450, with prices going up with the weight. They can also buy blankets and pillows. A Malaysian Nasi Lemak or a smoky, barbeque chicken meal is priced at Rs. 150. Meals have to be paid for even in the premium economy section of AirAsia X. The premium seat, with a fully flat bed is available at roughly three times the economy ticket.
The AirAsia group made $38 million in ancillary revenue in the quarter ended Sept 2009, earning close to $10 from every passenger apart from the ticket cost. The plan is to increase this to $12 this year. LCCs have triggered an ancillary revenue (merchandising) revolution and a CAPA report expects airlines to earn close to $58 billion from selling seat allocation to concert tickets and mobile credits.
At the back end the airline has looked for new ways to keep ahead. The most recent big move in January was an alliance with rival Australian low-cost carrier (LCC) Jetstar to pool spares and expertise that will result in huge savings for both the airlines. Jetstar is a subsidiary of Australian airline Qantas. LCCs typically operate on their own. This is the first time two growing players in the Asia-Pacific region, one of the fastest-growing markets in the world, are seeing value in working together. "The relationship is a foundation of much bigger things,'' said Alan Joyce, the Qantas managing director, while announcing the partnership in January this year.
For the moment, though, Fernandes knows he has his task cut out in India--and he isn't shying away from it.
Monday, February 8, 2010
Shipping Outlook - costlier
Container shipping may get costlier
The spot rate for container shipping on the Asia-Europe route is likely to rise to US$2000 per TEU in two months as carriers plan to take out more capacity following the Chinese New Year due from the middle of this month, the Hindu Business Line reported.
The present rate is $1763 per TEU. The Asia-Europe route has been defined at the route between the Chinese ports of Shanghai, Ningbo and Shenzhen and the European ports of Antwerp, Rotterdam, Bremerhaven and Hamburg and the spot rate as the charge for transporting a 20-ft container plus all surcharges excluding the terminal handling charges.
At present, carriers are charging 18 surcharges including the peak season surcharges although it is over. Meanwhile, the Shanghai Containerised Freight Index recently surged 7.2 percent as spot rates on Asia-Europe and Asia-US routes went up considerably.
According to Paris-based consultancy Alphaliner, the world's container fleet capacity decreased by 142,000 TEUs between the beginning of January and early February.
The spot rate for container shipping on the Asia-Europe route is likely to rise to US$2000 per TEU in two months as carriers plan to take out more capacity following the Chinese New Year due from the middle of this month, the Hindu Business Line reported.
The present rate is $1763 per TEU. The Asia-Europe route has been defined at the route between the Chinese ports of Shanghai, Ningbo and Shenzhen and the European ports of Antwerp, Rotterdam, Bremerhaven and Hamburg and the spot rate as the charge for transporting a 20-ft container plus all surcharges excluding the terminal handling charges.
At present, carriers are charging 18 surcharges including the peak season surcharges although it is over. Meanwhile, the Shanghai Containerised Freight Index recently surged 7.2 percent as spot rates on Asia-Europe and Asia-US routes went up considerably.
According to Paris-based consultancy Alphaliner, the world's container fleet capacity decreased by 142,000 TEUs between the beginning of January and early February.
Friday, January 22, 2010
Malaysia Institute of Transport
Assoc Prof Sabariah Mohamad,
Director of MITRANS
Praise be to Allah the Almighty, for the strength and determination that He has given us in performing our roles and striving towards making MITRANS the leading Institute in transport and logistics knowledge.
The past years have been the most challenging years for MITRANS. As an excellent centre of the university, MITRANS is entrusted with a mandate to contribute towards a world class university and internationalization. The performance of MITRANS was again measured through the key performance indicator of an excellent centre set by the Ministry of Higher Education of Malaysia. It was proud to announce that MITRANS was able to meet the KPI set however is now working towards enhancing its performance in research activities and at the same time providing opportunities for post-graduate research education.
The TRANSLINK project acquired through the EU Asialink has completed with a fruitful extended collaborations among its partners who are now putting up proposal for the formation of ASEAN-EURO School of Transportation to be funded by ASEAN agency and the EU- grant. MITRANS has also received invitation from the Provincia Allesandria, Italy as a partner on a transport and logistics project under the EU-SWITCH Asia schemes. If successful, this will be another 1.5million euro international project benefiting the country as the focus would be on ports and infrastructure development.
MITRANS has also received invitation from KYOTO University and NUS in a collaborative research on gateways infrastructure development. Having been trusted to host ANTLER (Asia Pacific Network for Transport and Logistics Education and Research), a project of UN-UNESCAP which will allow MITRANS to integrate in regional research collaborations and capacity building among members from Thailand, Philippines, Indonesia, Myanmar, Sweden and UK.
Another huge recognition is the endorsement of MITRANS to become the Malaysia Logistics Council excellent centre. MITRANS will be entrusted to conduct policy research and human capital development plans for the government and transport and logistics industry. Approval has been received by MITI and the Cabinet Committee Meetings held recently. Some amount of RM5 million launching grant and an annual RM one million research grant would be acquired. Discussions on the working mechanism are in progress.
The multi-disciplinary approach to transport and logistics research have allowed MITRANS to integrate a large number of academics from the various faculties in UiTM and allow the recruitment of young transport graduates of various faculties to gain experience as research assistant and some embark on their postgraduate studies.
The opportunities ahead requires MITRANS to strengthen its structure and more recruitments of qualified personnel are in progress.
The trust given by international members, the government and the industry have given us the confident that MITRANS can go real far to bring UiTM to the limelight. Great appreciations should go to all the staff of MITRANS, the managers and research fellows including the associate fellows for their hardworking and continuous effort in making all these success including all the support and guidance given by UiTM top management.
MITRANS will continue partnering with the transport and logistics industry players, the government agencies and other research institutions in championing transport research and education in the region and achieve the aspiration of UiTM in becoming a world class comprehensive research university.
From a mere airport services provider....
New projects to drive Senai growth
Services (SATS), the operator of Senai International Airport in Johor, expects to be profitable this year, seven years after securing the concession in 2003.
Deputy chief executive officer Shahrull Allam Shah Abdul Halim said the Senai free zone, the aviation park and the soon-to-be-opened Aeromall woud be the main drivers of growth for the firm.
"We are positive on the outlook for this year. We will have a positive earnings before interest, taxes, depreciation, and amortisation for the fiscal year ending December 31 2010," he told Business Times.
While the firm is operationally profitable, it has been in the red due to interest payments on loans it took to buy 1,120ha of plantation land next to the airport. The land is to be developed into a US$1.18 billion high-tech park, with a loan repayment period of over 10 years.
Shahrull said SATS broke even last year on $17.73 million revenue, attributing it to its turnaround measures.
The firm's revenue is mainly contributed by its aeronautical business and the rest from non-aeronautical activities such as retail and land development.
However, it expects the composition of revenue to change in the future.
Construction and infrastructure developments on the high-tech park will begin next month.
SATS also has 4ha of land fronting Senai Airport where it will build a 200-room hotel, apartments, offices and retail lots. Next to this, SATS has a 8ha site to be developed as an international trade centre, together with the Wenzhou Association of China.
The development of the Aeromall on a 20ha site, annexed to Senai Airport, is 65 per cent completed and targeted to open in the third quarter of 2010.
Shahrull said he expects the development to finish by end-June, which is six months behind target.
Aeromall is an extension to the existing terminal. The single-storey triangular structure with a central concourse area will be flanked by thematically designed retail and food outlets covering total retail space of 83,375 sq ft.
Services (SATS), the operator of Senai International Airport in Johor, expects to be profitable this year, seven years after securing the concession in 2003.
Deputy chief executive officer Shahrull Allam Shah Abdul Halim said the Senai free zone, the aviation park and the soon-to-be-opened Aeromall woud be the main drivers of growth for the firm.
"We are positive on the outlook for this year. We will have a positive earnings before interest, taxes, depreciation, and amortisation for the fiscal year ending December 31 2010," he told Business Times.
While the firm is operationally profitable, it has been in the red due to interest payments on loans it took to buy 1,120ha of plantation land next to the airport. The land is to be developed into a US$1.18 billion high-tech park, with a loan repayment period of over 10 years.
Shahrull said SATS broke even last year on $17.73 million revenue, attributing it to its turnaround measures.
The firm's revenue is mainly contributed by its aeronautical business and the rest from non-aeronautical activities such as retail and land development.
However, it expects the composition of revenue to change in the future.
Construction and infrastructure developments on the high-tech park will begin next month.
SATS also has 4ha of land fronting Senai Airport where it will build a 200-room hotel, apartments, offices and retail lots. Next to this, SATS has a 8ha site to be developed as an international trade centre, together with the Wenzhou Association of China.
The development of the Aeromall on a 20ha site, annexed to Senai Airport, is 65 per cent completed and targeted to open in the third quarter of 2010.
Shahrull said he expects the development to finish by end-June, which is six months behind target.
Aeromall is an extension to the existing terminal. The single-storey triangular structure with a central concourse area will be flanked by thematically designed retail and food outlets covering total retail space of 83,375 sq ft.
Thursday, January 14, 2010
ECONOMICS OF OPERATIONS
Jetstar teams up with AirAsia, Services sector still struggling: Economy Roundup
Wednesday, 06 January 2010 11:11
Patrick Stafford
Jetstar has formed an alliance with budget carrier AirAsia in order to cut costs, which will see the two companies produce a joint specification list for a new generation of aircraft.
Additionally, the two companies will also develop arrangements for passenger and ground handling, and will combine inventories for aircraft components and spare parts.
"Jetstar and AirAsia offer unmatched reach in the Asia Pacific region, with more routes and lower fares than their main competitors, and this new alliance will enable them to maximise that scale," Qantas chief executive Alan Joyce said in a statement to the ASX.
"Just as both carriers have pioneered the development of the low cost, long haul airline model, today's announcement breaks the mould of traditional airline alliances and establishes a new model for achieving reduced costs and increased efficiency."
Joyce also said after a press announcement the alliance would remain non-equity, but there could be arrangements made to look at co-share deals.
Also in the travel industry, Webjet shares have risen following an announcement from the company detailing a lift in the value of ticket sales for the first half of the financial year.
The company's performance has also prompted investors to expect similar results from Flight Centre and Wotif, both of which could amend their guidance statements.
Webjet announced a 37% rise in the value of ticket sales to $248 million, with managing director David Clarke saying the figures "totally defied" the downturn.
''We are seeing a massive increase in shopping activity, which would suggest pent-up demand, but we are not necessarily seeing that same growth in bookings yet,'' he told The Age. ''Consumers are still hoping that fares will go back to July levels [when they reached decade lows].''
Wednesday, 06 January 2010 11:11
Patrick Stafford
Jetstar has formed an alliance with budget carrier AirAsia in order to cut costs, which will see the two companies produce a joint specification list for a new generation of aircraft.
Additionally, the two companies will also develop arrangements for passenger and ground handling, and will combine inventories for aircraft components and spare parts.
"Jetstar and AirAsia offer unmatched reach in the Asia Pacific region, with more routes and lower fares than their main competitors, and this new alliance will enable them to maximise that scale," Qantas chief executive Alan Joyce said in a statement to the ASX.
"Just as both carriers have pioneered the development of the low cost, long haul airline model, today's announcement breaks the mould of traditional airline alliances and establishes a new model for achieving reduced costs and increased efficiency."
Joyce also said after a press announcement the alliance would remain non-equity, but there could be arrangements made to look at co-share deals.
Also in the travel industry, Webjet shares have risen following an announcement from the company detailing a lift in the value of ticket sales for the first half of the financial year.
The company's performance has also prompted investors to expect similar results from Flight Centre and Wotif, both of which could amend their guidance statements.
Webjet announced a 37% rise in the value of ticket sales to $248 million, with managing director David Clarke saying the figures "totally defied" the downturn.
''We are seeing a massive increase in shopping activity, which would suggest pent-up demand, but we are not necessarily seeing that same growth in bookings yet,'' he told The Age. ''Consumers are still hoping that fares will go back to July levels [when they reached decade lows].''
Shipping Outlook
Shippers set sail for better times
After sailing through choppy waters this year, the shipping industry seems to be heading towards recovery next year, buoyed by increasing global trade.
The Baltic Dry Index, a measure of shipping costs for commodities, was at its lowest on Jan 5 this year at 772 points from the record high of 11,793 points on May 20, 2008.
The Shipping Association Malaysia predicted in the middle of this year a 20% contraction of throughput volume by year-end due to the fall in demand and overcapacity.
At the height of the global economic downturn in the first quarter, container shipping freight rates – usually determined by demand for goods from Asia to the West – had dropped 50% to 80% from the previous quarter.
Maritime Institute of Malaysia senior fellow Nazery Khalid said barring any wild swings in the global economy and major shifts in the geo-political order, 2010 would be the year when shipping markets recover.
“Next year, global trade should pick up steam on the back of growing consumer confidence and consumption, as well as a rebound in business, manufacturing and production activities.
“Ports should register higher throughput volume compared with this year and more money should flow into shipping while shipyards should start to see a pick-up in orders,” he told StarBiz.
This would also benefit support service providers and players along the logistics chain such as freight forwarders and hauliers, Nazery said.
“Players in the sectors that have performed well amid the shipping slump, such as those in the tanker and offshore support vessel sectors, should continue sailing smoothly.”
However, Nazery said, amid the bullish forecast, players should not forget the bitter lessons from the economic recession.
“They should be mindful of their own contribution to one of the worst slumps in the history of modern merchant shipping.
“Unrestrained expansion, excessive speculation, reckless business decisions and greed on the part of shipowners and many other players in the maritime sector had contributed significantly to the severe overcapacity in the industry after enjoying a period of tremendous growth prior to the crash,” he said.
Meanwhile, Gagasan Carriers Sdn Bhd expects the shipping industry to see rates increasing in the second half of next year.
Managing director Captain Johari Mohd Noh said the industry went through a period of shock as a result of the US credit and financial crisis.
He noted that the past one year had been very challenging, with low freight rates and rising costs.
Additionally, financial institutions became “super prudent” in this trying time, thus making things worse, he said.
“But on a positive note, we are currently seeing some supply side adjustments due to an increase in (ship) scrapping, some cancellation of new (ship) buildings and an almost stagnant new orders.
“The recovery depends on an increase in confidence in the financial sectors and positive economic growth in major economies which we hope to see in the first half of next year.
“With that, the shipping industry should see rates increasing starting from the second half of 2010,” he said.
On the lessons to be learned from the crisis, Johari said there should be a better understanding between financial institutions and local shipping companies.
“A win-win solution is vital to ensure the survival of local shipping companies and that financial institutions continue to make their lending feasible in the long run.
“Additionally, the Government’s intervention is required to safeguard the survival of local shipping companies for long-term growth of the maritime industry,” he said.
A special fund should also be allocated not to rescue but to help struggling local shipping companies weather the current crisis, he added.
Standard & Poor’s Ratings Services, in a recent report, said the creditworthiness of transportation companies in the Asia-Pacific remained under downward pressure amid a significant slowdown in transport volume and intensifying pricing pressure.
“Standard & Poor’s has made seven rating downgrades and three downward outlook revisions or credit watch listings with negative implications over the last six months among regional transportation companies.
“The recovery prospect in cargo volume looks weak, given the fragile global economy,” it said.
Source: StarBiz
After sailing through choppy waters this year, the shipping industry seems to be heading towards recovery next year, buoyed by increasing global trade.
The Baltic Dry Index, a measure of shipping costs for commodities, was at its lowest on Jan 5 this year at 772 points from the record high of 11,793 points on May 20, 2008.
The Shipping Association Malaysia predicted in the middle of this year a 20% contraction of throughput volume by year-end due to the fall in demand and overcapacity.
At the height of the global economic downturn in the first quarter, container shipping freight rates – usually determined by demand for goods from Asia to the West – had dropped 50% to 80% from the previous quarter.
Maritime Institute of Malaysia senior fellow Nazery Khalid said barring any wild swings in the global economy and major shifts in the geo-political order, 2010 would be the year when shipping markets recover.
“Next year, global trade should pick up steam on the back of growing consumer confidence and consumption, as well as a rebound in business, manufacturing and production activities.
“Ports should register higher throughput volume compared with this year and more money should flow into shipping while shipyards should start to see a pick-up in orders,” he told StarBiz.
This would also benefit support service providers and players along the logistics chain such as freight forwarders and hauliers, Nazery said.
“Players in the sectors that have performed well amid the shipping slump, such as those in the tanker and offshore support vessel sectors, should continue sailing smoothly.”
However, Nazery said, amid the bullish forecast, players should not forget the bitter lessons from the economic recession.
“They should be mindful of their own contribution to one of the worst slumps in the history of modern merchant shipping.
“Unrestrained expansion, excessive speculation, reckless business decisions and greed on the part of shipowners and many other players in the maritime sector had contributed significantly to the severe overcapacity in the industry after enjoying a period of tremendous growth prior to the crash,” he said.
Meanwhile, Gagasan Carriers Sdn Bhd expects the shipping industry to see rates increasing in the second half of next year.
Managing director Captain Johari Mohd Noh said the industry went through a period of shock as a result of the US credit and financial crisis.
He noted that the past one year had been very challenging, with low freight rates and rising costs.
Additionally, financial institutions became “super prudent” in this trying time, thus making things worse, he said.
“But on a positive note, we are currently seeing some supply side adjustments due to an increase in (ship) scrapping, some cancellation of new (ship) buildings and an almost stagnant new orders.
“The recovery depends on an increase in confidence in the financial sectors and positive economic growth in major economies which we hope to see in the first half of next year.
“With that, the shipping industry should see rates increasing starting from the second half of 2010,” he said.
On the lessons to be learned from the crisis, Johari said there should be a better understanding between financial institutions and local shipping companies.
“A win-win solution is vital to ensure the survival of local shipping companies and that financial institutions continue to make their lending feasible in the long run.
“Additionally, the Government’s intervention is required to safeguard the survival of local shipping companies for long-term growth of the maritime industry,” he said.
A special fund should also be allocated not to rescue but to help struggling local shipping companies weather the current crisis, he added.
Standard & Poor’s Ratings Services, in a recent report, said the creditworthiness of transportation companies in the Asia-Pacific remained under downward pressure amid a significant slowdown in transport volume and intensifying pricing pressure.
“Standard & Poor’s has made seven rating downgrades and three downward outlook revisions or credit watch listings with negative implications over the last six months among regional transportation companies.
“The recovery prospect in cargo volume looks weak, given the fragile global economy,” it said.
Source: StarBiz
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