Air India losses astound; Ryanair to run airports?

Victoria
By Victoria August 22, 2012 14:15

Air India losses astound; Ryanair to run airports?

So what is the difference between an airline that fails and an airline that does not?
It would be fun to leave that one with you and see the responses but for this slot I must answer that it is Chapter 11 in the US and government support just about everywhere else.

There are few airlines that match the Indian flag carrier. Air India’s collective losses from 2007 to 2012 are now over $5bn (Rs 28,046 crore), the aviation ministry told the Indian Parliament yesterday.

Air India is draining the Indian state of funds at a faster rate than it is able to invest in the airline sector at the moment. In fact the Indian aviation minister Ajit Singh told parliament that only 16 of Air India’s 184 routes in the April-June 2012 ran in the black. Of these nine routes failed to cover the basic fuel cost of operations before any other running cost was factored-in. Nine services did not even meet their fuel costs (all reported here last week).

As Air India is propped-up by government there is the fact that within the EU this is never going to be the case again for countries that have been bailed-out. We have lost some airlines and others are being sold. Aer Lingus is on the brink of sale. TAP’s losses of this month are good news for IAG and others as it will ensure the price of the airline will be partially depressed at sale later this year.

Over in South Africa 1Time has filed for a business rescue. In South Africa “Business Rescue” gives you protection from creditors that may want to file for liquidation while you are turning the business around.

The firm has about R320-million in short-term debt and had been in negotiations with creditors while still racing up losses (In April, the company reported a R157-million loss). 1Time chief executive Blacky Komani has confirmed that the airline would continue scheduled services while the board tries to come up with a strategy to present to creditors and investors.

While red ink flows in many areas of the globe there is still sheer to be had if one takes the time to look and this week it is in the form of SkyJet Airlines.

SkyJet Airlines is about to begin operations in the Philippines. Owned by Magnum Air, SkyJet expects to receive approval of its Air Operator’s Certificate (AOC) soon that will allow it to begin operations in the third quarter. If approved, SkyJet will fly from Ninoy Aquino International Airport in Manila and the Diosdado Macapagal International Airport in Clark, Pampanga.

“We have already complied with all the necessary documents, trainings, aircraft data and other pertinent requirements set by CAAP. We are confident that the agency will soon release our AOC. We hope they will consider that we are flying to underserved and unserved destinations with great tourism potential ,” said Capt. Tony Buendia, Magnum Air(Skyjet) Inc. Director for Flight Operations.
Initially SkyJet will fly to four destinations: Basco in Batanes, Virac in Catanduanes, Catarman in Northern Samar and Surigao, with more to be added as the company expands. SkyJet will fly BAe 146-200s.

But over in Europe Ryanair always provides a bit of fun for us, and we love them for it. This time it is the cracking prospect of Ryanair owning a chunk of London Stansted Airport in England. Ryanair has announced its interest in acquiring a 25% stake in London Stansted following the news that BBA will divest the airport as per the order from the Competition Commission. With a price tag of more than £1 billion it seems that Ryanair is willing to part with over $400m for the stake. It is hard to see what 25% ownership will get them other than hassle unless they have a potential partner in the wings from China or the Middle East willing to foot the other 75% on the basis that Ryanair does not move from the airport.

One can only imagine with horror the site that will greet passengers at any airport that is under the complete control of Ryanair (a blue and yellow mess with no staff and crap junk food priced at Michelin Star restaurant prices one assumes with coin operated toilets that only take high denominations and give no change, and no seats in the terminal other than £25 pre booked ones. The terminal will have a big sign at the staff entrance saying “pack ‘em in and get ‘em spending” while the whole thing will be a wheelchair free zone), I think we will have a great deal of fun with this story as it moves along.

Victoria
By Victoria August 22, 2012 14:15
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