YEARBOOK 2013 SOUTH ASIA 1 PROFILES SOUTH ASIA TOP 10 AIRLINES SOURCE: CAPA - CENTRE FOR AVIATION AND INNOVATA | WEEK startinG 31-MAR-2013 RANKING CARRIER NAME SEATS 1 IndiGo 500,580 2 Air India 442,828 3 Jet Airways 413,303 4 SpiceJet 375,833 5 Pakistan International Airlines 132,880 6 GoAir 129,240 7 JetLite 114,448 8 SriLankan Airlines 95,606 9 Air India Express 83,538 10 Biman Bangladesh Airlines 34,032 SOUTH ASIA TOP 10 AIRPORTS SOURCE: CAPA - CENTRE FOR AVIATION AND INNOVATA | WEEK startinG 31-MAR-2013 South Asia RANKING CARRIER NAME SEATS 1 Delhi Indira Gandhi International Airport 919,165 2 Mumbai Airport 831,365 Outlook 3 Chennai Airport 352,124 4 Bengaluru International Airport 332,111 5 Dubai International Airport 309,142 NDIAN AVIATION IS SEEING SIGNS 6 Kolkata Netaji Subhas Chandra Airport 278,652 OF REVIVAL after another difficult year 7 Hyderabad Rajiv Gandhi International Airport 252,504 marked by continuing losses, a 3% decline in 8 Colombo Bandaranayake International Airport 187,126 traffic and the exit of Kingfisher, which up 9 Kochi Airport 140,679 untilI less than two years ago was the largest single 10 Karachi Quaid-E-Azam International Airport 133,442 domestic airline in the country ... SOUTH ASIA CAPACITY SEATS PER WEEK SOURCE: CAPA - CENTRE FOR AVIATION AND INNOVATA | WEEK startinG 31-MAR-2013 IndiGo 500,580 Air India 442,828 Jet Airways 413,303 SpiceJet 375,833 Emirates 185,924 Pakistan Int’l 132,880 Airlines GoAir 129,240 JetLite 114,448 SriLankan 95,606 Airlines Other 1,024,457 0K 250K 500K 750K 1,000K 2 AIRLINE LEADER | MAR-APR 2012 SOUTH ASIA FLEET SOUTH ASIA PROJECTED DELIVERY DATes FOR AIRCRAFT ON ORDER SOURCE: CAPA - CENTRE FOR AVIATION | WEEK startinG 31-MAR-2013 SOURCE: CAPA - CENTRE FOR AVIATION | WEEK startinG 31-MAR-2013 75 800 50 600 577 504 400 25 200 0 21 24 62 2013 2014 2015 2016 2017 2018 2019 2020 20 2022 2023 20 2025 0 In service In storage On order A320 A330 A350 A380 777 787 737 DHC6 SOUTH ASIA BREAKDOWN FOR AIRCRAFT IN SERVICE SOUTH ASIA MOST POPULAR AIRCRAFT TYpes IN SERVICE SOURCE: CAPA - CENTRE FOR AVIATION | WEEK startinG 31-MAR-2013 SOURCE: CAPA - CENTRE FOR AVIATION 2.8% 0.3% 8.9% 15.9% A320 Narrowbody Jet 12.5% 29.6% 737 Widebody Jet 4.2% Turboprop ATR 4.3% Small Commercial 777 Turboprop DHC6 Regional Jet 5.9% A330 17.7% Piston Engine Aircraft DHC8 6.2% 57.7% Others 7.8% 26.0% SOUTH ASIA CAPACITY SEATS SHARE BY ALLIANCE LCC CAPACITY SHARE (%) OF TOTAL SEATS: 2001-2013 SOURCE: CAPA - CENTRE FOR AVIATION AND INNOVATA | WEEK startinG 31-MAR-2013 Source: CAPA - CENTRE for Aviation WITH data provided BY OAG 3.4% 0.3% 60 57.0% 55.8% 5.4% 50.0% 50.0% 7.7% 50 47.3% 42.8% 38.6% Unaligned 40 oneworld 30 Star 22.7% SkyTeam 20 oneworld (affiliate) 10 5.8% 0.1% 0.9% 83.3% 0 0K 250K 500K 750K 1,000K 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Jan- Mar 2013 3 ... Many of the structural challenges in Indian aviation – such as the uncertain and unpredictable policy environment, intervention by the 0 JET AIRWAYS EXPECTED ORDER regulator on commercial matters, high sales taxation on fuel, and the low 10 OF NARROWBODIES productivity of airports and airspace – remain unaddressed. However, two key developments in recent months have given rise to greater optimism. Firstly, Kingfisher’s exit in Oct-2012 has positively impacted market dynamics for the remaining carriers. The withdrawal of capacity, aggressively on domestic and short-haul combined with pricing discipline, resulted in higher yields and improved international routes and is also evaluating the financial performance in FY2013, at least up until 4Q when aggressive possibility of launching a domestic regional discounting returned. subsidiary utilising turboprop aircraft. IndiGo’s And secondly, the historic decision by the government in Sep-2012 to international network strategy is founded on allow foreign airlines to invest up to 49% in Indian carriers is a vital step connecting multiple Indian cities to high- in establishing a more professional and corporatised sector in India. It traffic destinations such as Dubai, Bangkok offers the promise not only of introducing strategic capital and expertise and Singapore. This is in contrast to SpiceJet, into the market, but also delivers a much needed confidence factor for which has instead launched services on other institutional funding. routes less travelled such as Kabul, Male and CAPA estimates that India’s carriers will report a combined loss of Guangzhou. approximately USD1.6 billion in the 12 months ending 31-Mar-2013, SpiceJet is another potential candidate with most of this accounted for by Air India and Kingfisher Airlines. for securing a foreign investor in 2013. The Air India has delivered a significant improvement in its operational airline is understood to be in quite advanced and financial performance in FY2013, but its beleaguered business plan discussions with more than one party, is under attack on all fronts. With poor aircraft utilisation, a huge interest including foreign airlines as well as private burden, a bloated workforce, insufficient recapitalisation and regular equity funds. A narrowbody order may be government intervention, the challenges are huge. If the carrier is to have finalised in the second quarter of 2013 after any chance of success it must be radically restructured both financially a new investor comes on board. The Boeing and operationally. This will require a level of political will to take tough 737 MAX is the most likely equipment, decisions, a feature that has been absent to date. If decisive action is particularly as there are no available A320neo postponed – as we expect – Indian taxpayers will bear the cost. delivery slots within the required timeframe. Taking advantage of the foreign investment reforms, Etihad looks SpiceJet remains undecided on whether to set to acquire a stake in Jet Airways, India’s second largest international exercise its options for a further 15 Q400s, and domestic carrier. There is likely to be an extensive codesharing however CAPA expects that the carrier will arrangement between the two new partners, network and scheduling increase its regional fleet in due course. coordination and integration of frequent flyer programmes. The When the Indian Government decided to Jet Airways-Etihad deal has the potential to be a game-changing allow foreign airline investment, the primary combination. It brings together one of the most successful airlines in intention was to open a source of capital India with a well-capitalised Gulf carrier with global ambitions. to support the recovery of the incumbent Critically for Jet this deal will provide it with the capital that it requires carriers, rather than enabling the entry of at this time. Jet Airways is expected to place an order in the coming well-capitalised start-ups to compete with months for up to 100 narrowbodies. Following the conclusion of the them. However in Mar-2013 the Foreign Etihad transaction, Jet Airways is also expected to have the capital to Investment Promotion Board (FIPB) ruled implement a clearer market segmentation strategy, in particular the that foreign airline investment is not limited establishment of a strong hybrid model under the JetKonnect brand. to existing carriers and as a result it approved IndiGo remains the leading performer in the market, both financially a 49% investment by AirAsia in a proposed and from a brand perception perspective. The carrier continues to grow joint venture with the Tata Group and Telestra Trading. The carrier, to be named AirAsia India, intends to launch domestic services from Kingfisher’s exit in Oct-2012 has positively a hub in Chennai to non-metro cities across impacted market dynamics for the the country. FIPB approval is just the first step of the remaining carriers. regulatory process and the joint venture 4 will now need to apply for a licence from Airlines is struggling to take advantage of the boom in inbound tourism the Directorate General of Civil Aviation to Sri Lanka following the end of the civil war. International visitor (DGCA). If AirAsia India is successful numbers have doubled in three years from 448,000 in 2009 to just over in securing a licence it will introduce a one million in 2012. However, SriLankan Airlines, which has been loss- formidable new entrant into India’s airline making since 2008, reported a record loss of USD135 million for FY2012 industry. The venture combines a highly and a similar result is expected this year. Europe contributed 60% of last successful and aggressive LCC with one of year’s loss due to weak economic conditions and strong competition from the most respected and financially sound the Gulf carriers. As a result the airline plans to re-orient its network Indian business houses. It is also an important towards India and North Asia over the next few years. With SriLankan test case on the government’s stance towards expected to become a full member of the oneworld global alliance in the foreign investment in general and the airline next 12 months a stronger relationship is likely to emerge with Cathay industry in particular, as well as the Ministry’s Pacific. As a result Hong Kong could provide a useful gateway for the position on the award of new licences. airline into this region. With intense competition on domestic In the Maldives, the two locally-based international carriers are routes – which could increase further if new targeting complementary growth markets. Maldivian, the government- licences are awarded – India’s airlines have owned airline, which was earlier limited to domestic routes and a short- been keen to expand overseas.