Air Asia keen on increasing stake in Zest Air

MANILA – The Philippine unit of Southeast Asia’s largest budget airline plans to increase its stake in Zest Airways Inc.

“Yes of course, we are open. The initiative should come from Ambassador (Alfredo) Yao on how much he is willing to sell. We’ve discussed it. I don’t want to preempt what Ambassador Yao wants to do,” Marianne Hontiveros, Air Asia Inc chief executive told reporters.

“Of course Zest is attractive to us. That is why we’re interested in the company,” she added.

Philippine AirAsia last March forged a partnership with Zest Air, allowing the former, which operates out of Clark, to gain access to the latter’s slots at the Ninoy Aquino International Airport. Philippines AirAsia holds an 85 percent economic stake and a 49 percent voting stake in Zest Air while the latter owns a 15 percent stake in the former.

AirAsia Group owns 40 percent of Philippines AirAsia. The remaining 60 percent is held by Hontiveros, Michael Romero, Antonio Cojuangco and Yao.

In a report to Bursa Malaysia, AirAsia Group said it expects Philippines AirAsia to be profitable next year, as the carrier’s network expands.

Philippines AirAsia, which started operations in the country in March last year incurred a net loss of $7 million in the second quarter of the year, a slight improvement from the $8 million in the same period in 2012.

Earlier, Centre for Asia-Pacific Aviation (CAPA) said in a report that the outlook for Air Asia’s Philippine unit is likely to improve once its operation is consolidated with Zest Airways.

“Zest changes the outlook for Philippines AirAsia considerably, particularly if the two carriers are able to fully integrate their operations,” CAPA said.

A single brand and product across the Philippine market, including both Manila and Clark, “should improve AirAsia’s position in the Philippines,” the report said.

VietJet Considers IPO After Turning Profitable

VietJet Aviation Joint Stock Co., Vietnam’s only privately owned carrier, said it’s considering an initial public offering to fund expansion after becoming profitable this year.

VietJet may hold an IPO within 18 months to 42 months, Managing Director Luu Duc Khanh said in an interview. It posted pretax profit of about 120 billion dong ($5.7 million) in the seven months ended July, Khanh said. The Hanoi-based carrier lost money in 2012, he said, declining to give figures.

The budget airline, which has 20 percent of the domestic market after starting operations in December 2011, began flying abroad in February. VietJet will add planes as it focuses on the local market and is planning more routes overseas with the Asia-Pacific region forecast by the International Air Transport Association to surpass Europe and North America in 2016.
“When we did a business plan to set up this airline, we projected three years of losses,” Khanh said yesterday in Ho Chi Minh City. “The result is far beyond our expectation.”

The carrier may consider listing on a stock exchange outside of its home country, Khanh said.

“In Vietnam, the market might be small,” he said. “We might think of doing an IPO in Singapore or Hong Kong.”

VietJet increased its share in Vietnam’s domestic aviation market to 20 percent as of late August from 14 percent in mid-July by adding frequencies on routes with new aircraft, said Brendan Sobie, Singapore-based chief analyst at CAPA Centre for Aviation.

Meaningful Share

The market share is ahead of Jetstar Pacific Airlines Aviation Joint-Stock Co.’s 12 percent, according to data from the CAPA Centre for Aviation. Jetstar Pacific is a unit of state-owned Vietnam Airlines Corp., which controls 68 percent of the market, according to CAPA’s data.

“They’ve achieved a meaningful market share in Vietnam, and created a brand that has some traction,” Sobie said. “Vietnam remains a relatively regulated market so it’s not the easiest market in which to launch a low-cost carrier, but the rewards of succeeding there should be high.”

VietJet’s success comes after two predecessors within the country failed, and demonstrates the opportunities for low-cost carriers in Vietnam. Across Southeast Asia, budget airlines including Malaysia’s AirAsia Bhd. (AIRA), Singapore’s Jetstar Asia Airways Pte., Indonesia’s PT Lion Mentari Airlines are winning more customers as economic expansion in the region enables more people to travel.

Domestic Focus

VietJet fills 91 percent of its domestic flights on average, more than the company’s initial expectation of about 85 percent, Khanh said.

VietJet carried about 1.9 million passengers so far this year, it said. The total number of air travelers in Vietnam in the first eight months of the year was about 11.3 million, according to the General Statistics Office in Hanoi.

“Our focus is still on domestic operations, because there is still room in the market,” Khanh said. “Out of Vietnam is additional to support our operations in Vietnam. If the market is good, we’ll expand.”

The airline started flying between Bangkok and Ho Chi Minh City in February, and in June began flights between Thailand’s capital and Hanoi.
To support expansion, the carrier expects to take delivery of two additional planes by October, increased the fleet of Airbus SAS 320s it’s leasing to 10. In 2014, it may lease as many as 10 additional 320s, and will probably decide this year on the purchase of either A320s or Boeing Co. (BA)’s 737s for delivery in 2015 or 2016, Khanh said.

Airbus, Boeing

“Boeing and Airbus, they are visiting us almost every week,” Khanh said. “We have a team working on the aircraft purchase now,” he said, declining to estimate the size of the order.

VietJet may forge alliances to expand overseas, similar to the joint venture agreement with Kannithi Aviation Co.’s Kan Air in June to start services from Thailand by next year, Khanh said. It will look at ventures in markets including China, South Korea, Indonesia, Japan and Taiwan, he said.
International expansion will probably be more challenging for VietJet, said Timothy Ross, a Singapore-based transportation analyst at Credit Suisse Group AG.

“Bangkok is a natural extension for VietJet in that it’s consistent with the capabilities of their fleet and is linking two countries not too far off on the income curve,” Ross said. “In a place like Singapore, it would be very competitive.”

VietJet is forging ahead, with plans for a second agreement for a joint venture next year, Khanh said, citing China, Japan, South Korea and Taiwan as possibilities.

The airline also plans to begin flights to Seoul from Hanoi in the fourth quarter, and may add flights to destinations in China, Indonesia, Taiwan, Hong Kong, and Singapore next year, Khanh said.
“Aviation is very competitive,” Khanh said. “If you want to be an international airline, you have to go there and compete.”

Toronto fourth most livable city in world: Economist全球最宜居城市 溫市排第三

Three of the top 10 most livable cities in the world are Canadian.

Vancouver, Toronto and Calgary are third, fourth and fifth, respectively, on the list compiled annually by the Intelligence Unit of the business and political weekly magazine The Economist. That’s also where they stood last year.

Both Toronto and Vancouver won perfect 100-point scores for stability, healthcare and education. The 100-point score for infrastructure The Economist gave Melbourne and Vienna propelled them to first and second place on the list.

Melbourne has been the top city on the livability list since 2011, when it squeezed out Vancouver. Toronto and Calgary have traditionally been in the top five as well.

The Economist bases its ratings of 140 cities on 30 factors across five categories: stability, healthcare, culture and environment, education and infrastructure.

Seven of the top 10 cities are in Canada and Australia, which the Intelligence Unit points out reflects them being mid-sized cities in wealthier countries with relatively low population density and good healthcare and education.

The other cities on the top 10 list, from fifth through ninth, are Adelaide, Sydney, Helsinki and Perth.

Half of the bottom 10 cities are in Africa: Douala, Cameroon; Tripoli, Libya; Algiers, Algeria; Harare, Zimbabwe and Lagos, Nigeria.

Syria’s capital of Damascus ranks dead last because of the civil war tearing apart the country. Damascus also registered the biggest decline in livability over the last five years, by more than 20 per cent.

The livability list also highlights the cities with the most improved scores over the last five years. Bogota, Colombia, improving the most: by 7.9 per cent since 2008, because of an end to violence created by the drug trade and guerrilla activity.




Top 10 most liveable cities 2013:

1. Melbourne, Australia, (97.5)

2. Vienna, Austria, (97.4)

3. Vancouver, Canada, (97.3)

4. Toronto, Canada, (97.2)

5. Calgary, Canada, (96.6)

6. Adelaide, Australia, (96.6)

7. Sydney, Australia, (96.1)

8. Helsinki, Finland, (96.0)

9. Perth, Australia, (95.9)

10. Auckland, New Zealand, (95.7)