Korean Air to offer duty free shop onboard its A380s

6th April, 2011

Korean Air will become the first airline to offer a flying duty free shop when its first of ten A380s enters service on 10-Jun-2011. The outlet has been designed and manufactured for Korean Air by AIM Aviation and will replace 13 seats on the A380. Korean’s A380s will feature a 407-seat layout with 12 first class seats, 94 in Prestige business class and 301 in economy class.

Lancome has purchased the first advertising spot inside the shop, which will promote “new, existing and exclusive products” from the airline’s duty-free range. It will be complemented by the continuation of the regular cart service, according Heather Cho, from Korean Air’s Catering & Inflight Sales Business Division, speaking with Australian Business Traveller.

First class passengers will have the opportunity to browse the shop and make purchases, followed by business class and other passengers.

The Korean flag carrier is hopeful the new A380 offering will turn around a slump in its inflight duty free sales. Korean Air has set a target of USD200 million in inflight duty free sales revenue for 2011 – in line with USD201 million generated in 2010. Deputy General Manager Inflight Sales, JY Jung, told Trend, “The indiscriminate promotions of airport duty free shops have seriously affected our inflight sales. Monthly revenue has gradually decreased since Jun-2010 and the slump is continuing.”

Korean Air’s shares fell 0.9% yesterday.

Selected Asia Pacific airlines daily share price movements (% change): 5-Apr-2011

Posted in Uncategorized | Leave a comment

Singapore Airlines’ load factors fall sharply in February

Singapore Airlines has seen a decline in load factors since Aug-2010, as the airline continues to grow capacity strongly. East Asia (which includes Japan) is SIA‘s biggest market.

Singapore Airlines international capacity by region (14-Mar-2011 to 20-Mar-2011)

Source: Centre for Asia Pacific Aviation and Innovata

SIA, the world’s second biggest carrier by market capitalisation, recorded a 1.0% year-on-year decline in systemwide passenger carriage (RPKs) in Feb-2011, while capacity (measured in ASKs) grew by 5.4%. As a result, passenger load factor (PLF) declined by 4.8 percentage points to 75.1%.

Singapore Airlines Passenger Load Factor (2009 to 2011)

Source: Centre for Asia Pacific Aviation and airline reports

All regions except East Asia recorded declines in passenger load factors over the same month last year. A new double-daily service to Tokyo-Haneda was launched on 31-Oct-2010, complementing the existing twice-daily services to Tokyo-Narita.

SIA’s Japan services are operating as per normal schedules since last Friday’s earthquake and tsunami, although it will delay the introduction of A380 equipment on SQ11/12 to Los Angeles via Tokyo Narita from late Mar-2011 “until further notice”, due to “lesser demand” for travel to Japan. The service will continue to operate with B747-400 aircraft.

Separately, an airline spokesman said the carrier is seeing some cancellations for flights to Tokyo, while “loads for flights out of the Japanese capital are strong”.

Singapore Airlines Passenger Load Factor (East Asia) (2009 to 2011)

Source: Centre for Asia Pacific Aviation and airline reports

SIA stated the load factor declines for the other regions in Feb-2011 were “in part due to a smaller volume of low fare promotional traffic this year.” Capacity was added to several destinations, including Manchester (via Munich), Houston (via Moscow), Osaka and Seoul.

Load factors in the Americas market fall below 70% for the first time since Jun-2009. SIA’s all-Business Class service to Los Angeles returned to daily operations from early Oct-2010. Load factors to the region have fallen (year-on-year) every month since.

Singapore Airlines Passenger Load Factor (Americas) (2009 to 2011)

Source: Centre for Asia Pacific Aviation and airline reports

Load factors to Europe have also slumped, dipping below 2009 levels in Jan-2011.

Singapore Airlines Passenger Load Factor (Europe) (2009 to 2011)

Source: Centre for Asia Pacific Aviation and airline reports

Load factors to Southwest Pacific (SIA’s fourth biggest market – a region dominated by Australia) have held up, but are below last year’s strong levels.

Singapore Airlines Passenger Load Factor (South West Pacific) (2009 to 2011)

Source: Centre for Asia Pacific Aviation and airline reports

West Asia (ie India) and African loads have also eased, but are well above the 2009 lows.

Singapore Airlines Passenger Load Factor (West Asia And Africa) (2009 to 2011)

Source: Centre for Asia Pacific Aviation and airline reports

Overall cargo traffic (measured in freight tonne kilometres) improved by 3.6%, but cargo capacity romped ahead by 10.1%. This led to a 3.8 ppts drop in cargo load factor, which declined in all regions. SIA stated, “the large decline in East Asia’s cargo load factor was a result of seasonal slow airfreight activities across the Lunar New Year holidays.”

Singapore Airlines Cargo Load Factor (2009 to 2011)

Source: Centre for Asia Pacific Aviation and airline reports

CAPA Members please note that all the graphs presented here are available on the Singapore Airlines profile. Simply login and go to the Traffic tab on the SIA page. Graphs can be instantly generated and three years of data is downloadable to excel. CAPA now offers live monthly traffic data online for 125 airlines worldwide:

Asia Pacific:
Air China, Air New Zealand, AirAsia, ANA, Asiana, Beijing Capital Airlines, Cathay Pacific, Chengdu Airlines, China Airlines, China Eastern, China Express Airlines, China Southern, China United Airlines, Chongqing Airlines, EVA Air, Garuda, Grand China Air, Hainan Airlines, Hebei Airlines, Japan Airlines, Jet Airways, Joy Air, Juneyao Airlines, Korean Air, Kunming Airlines, Lucky Air, Malaysia Airlines, Mandarin Airlines, Okay Airways, Philippine Airlines, Qantas, Rex, Royal Brunei Airlines, Shandong Airlines, Shanghai Airlines, Shenzhen Airlines, SIA, Sichuan Airlines, Silkair, Spring Airlines, Thai Airways, Tianjin Airlines, Tiger Airways, Transasia Airways, UNI Airways, Vietnam Airlines, Virgin Blue, West Air, Xiamen Airlines.

Adria Airways, Aegean Airlines, Aer Lingus, Aeroflot, Air Berlin, Air FranceKLM, Air Malta, airBaltic, Alitalia, Blue1, bmi, British Airways, Cargolux, Croatia Airlines, Cyprus Airways, Czech Airlines, easyJet, Finnair, Iberia, Jat Airways KLM, LOT, Lufthansa, Luxair, Malev, Monarch, Norwegian Air Shuttle, Olympic Air, Ryanair, SAS, Turkish Airlines, Vueling.

North America:
Air Canada, AirTran, Alaska Airlines, Allegiant, American Airlines, American Eagle, Continental Airlines, Delta, Frontier, Great Lakes Aviation, Hawaiian Airlines, JetBlue, Pinnacle, Porter Airlines, Republic, SkyWest, Southwest, Spirit Airlines, United Airlines, US Airways, WestJet.

Latin America:
Abaeté, Air Minas, Avianca, Azul, Copa, Cruiser, GOL, LAN, Meta, NHT, Noar, Pantanal, Passaredo, Puma Air Rico, Sete Linhas Aéreas, Sol, TAM, Team, Total, Trip, Webjet.

Posted in Uncategorized | Leave a comment

Skyteam Alliance members more valuable than Star and oneworld. Airline Market Caps

Skyteam Alliance members more valuable than Star and oneworld. Airline Market Caps Part 2

9th March, 2011

Skyteam Alliance members more valuable than Star and oneworld. Airline Market Caps Part 2

The first part of this report on airline market capitalisations, suggested the world’s airlines are today worth approximately USD570 billion, based on the current market caps of listed airlines and the global fleet as a basis for extrapolation.

But, as noted, discounting the fact that many of the world’s best-run airlines are already listed, (having benefited from the disciplines of privatisation), the true value of the remainder is probably much less.

Indeed, the world’s airlines (listed and unlisted) may have a combined worth equivalent to the largest single company by market capitalisation, Exxon Mobil at around USD420 billion. (Note: the world’s leading company, Saudi Aramco, which is responsible for Saudi Arabia‘s massive oil reserves, is unlisted and valued at around USD780 billion, according to the Financial Times).

World’s biggest listed companies (USD, bill)



Market Capitalisation (USD, bill)


Exxon Mobil Corp



Apple Inc



Petrochina Co






BHP Billiton



Industrial and Commercial Bank of China



Royal Dutch Shell



China Construction Bank



Microsoft Corp



General Electric



Berkshire Hathaway









Nestle SA



Google Inc



CHINA Mobile









JPMorgan Chase


As at 06-Mar-2011
Source: Bloomberg

See related report: Air China value greater than United-Continental, American, JetBlue, AirTran & US Air combined. Pt 1

Star Alliance has biggest capitalisation, but SkyTeam the best average

Even combining airlines in their global alliances creates small economic entities by corporate standards. (The alliances themselves have emerged because cross-border mergers in the industry have been so difficult and competition concerns so rigid).

Star Alliance has 14 listed members and unsurprisingly has the biggest combined capitalisation of USD71.7 billion. Some 108 individual companies have market capitalisations in excess of the listed Star alliance carriers.

But the most valuable alliance, in terms of the average of its listed carriers, is SkyTeam, at USD5.16 billion – just ahead of Star (USD5.12 billion) and well ahead of oneworld (USD3.74 billion).

Market capitalisation by airline alliance


Market cap of
listed members
(USD, mill)

Number of
listed members

market cap

Star Alliance
















Source: Centre for Asia Pacific Aviation & Bloomberg

North American and European airlines out of favour

Airlines in established markets are definitely out of favour. 23 European airlines (26%) of the total, accounted for just under 20% of global market cap. The figures were similar for North American airlines.

The average market capitalisation of the 87 listed airlines surveyed by the Centre for Asia Pacific Aviation (CAPA) is just under USD2.4 billion.

Emerging markets are the place to be

On the other hand, just 20 Asia Pacific airlines (accounting for 23% of the world’s listed carriers) represented 51.6% of total world airline capitalisation.

Airline market capitalisation by region: 03-Mar-2011

Source: Centre for Asia Pacific Aviation & Bloomberg

The four listed Latin American airlines (LAN, TAM, COPA and GOL) had an average market capitalisation some two times the global average, while Asia Pacific airlines were also above average. (NB: there are several smaller European and North American regional carriers that do affect the average).

Average airline market capitalisation by region: 03-Mar-2011

Source: Centre for Asia Pacific Aviation & Bloomberg

Posted in Uncategorized | Leave a comment

Corporate travel will rebound in 2011: After two years of attrition, recovery is in the air

Corporate travel will rebound in 2011: After two years of attrition, recovery is in the air

10th March, 2011


After two years when global respondents to Ascend’s annual business travel survey reported cuts in air travel and corporate budgets, the latest survey indicates significantly better prospects for airlines in 2011.

Ascend’s annual poll of business travellers, conducted in co-operation with CAPA, found:

  • 49% expect to fly more for business in 2011 – compared to 35% last year and only 10% in 2009.
  • Travellers indicated an overall 5.5% increase in the number of business flights for 2011, and 48% were expecting an increase in travel budgets – compared to 28% last year and just 9% in 2009.
  • Only 20% of travellers expected a decrease in 2011 budgets, compared to 54% last year.
  • Good news for airlines was that budgets and flights growth for 2011 were expected to move in step.

Peter Morris, Ascend’s Chief Economist, says the poll underlines the way that corporate travel and economic recovery go hand in hand. “To get global business going again international business people have to fly, and after the many business challenges of 2009 and 2010, travellers clearly feel now is the time to start rebuilding their businesses”.

The survey highlights a range of changes for better and worse that respondents have noted over the last two years, and highlights a healthy scepticism about the benefits of future airline consolidation – where more than 70% believe this will bring higher prices and less competition.

North American respondents are feeling the most sorry for themselves, with 70% saying that airline service on board has declined over the last two years – and offered the opportunity to say what has improved for the business traveller, some 40% of North American respondents replied ‘Nothing’. This contrasted with rather more optimism among European or Asia Pacific respondents.

Looking at what has improved over the last two years respondents noted:

  • Greater efficiency in check in and pre-flight
  • Cheaper fares
  • More choice of low cost airlines

Looking at what has got worse over the last two years, respondents noted:

  • Crowded planes
  • Increased security queues
  • Decline in ‘on board’ service

More than 380 corporate travellers from around the world responded to the survey, of whom the majority were long haul business class travellers. The sample reported company travel trends, so cover a much wider population.

The survey also highlighted ongoing cost reduction strategies by companies, as well as attitudes to low cost airline travel and the airlines’ use of the internet.

Finally in an open ended response, the list of complaints about global business air travel threw up a litany of concerns, headed by all aspects of security processes.

Posted in Uncategorized | Leave a comment

Scientists warn of ‘dangerous over-reliance’ on GPS

  Scientists warn of ‘dangerous over-reliance’ on GPS Directions are shown on a GPS unit mounted in a car travelling along Kaiserdamm at dusk in Berlin, October 8, 2010. Developed nations have become “dangerously over-reliant” on satellite navigation systems such … Continue reading

Gallery | Leave a comment

Why The Best Investment of the Decade Could Gain +1,400% From Here

Why The Best Investment of the Decade Could Gain +1,400% From Here

On a typical day, Libya produces about 1.6 million barrels of oil.

The majority of it gets exported to Europe.

But as political tensions escalated over the past two weeks, oil firms operating in Libya — including BP and Royal Dutch Shell — were forced to suspend and even evacuate operations all together.

As a result, as much as 80% of Libya’s entire oil supply shut off practically over night.

But here’s where it gets interesting…

Even though Libya only contributes 5% of the world’s oil exports, the recent supply disruption helped trigger a 20% surge in the price of crude.

Take a look…

There’s only one reason why the price of oil has surged so fast and furious.

It’s the same reason why another commodity that I call “The Best Investment of the Decade” could gain +1,400% from today’s prices…

… and how investments in a third commodity — what I call “The Oil of the 21st Century” — are returning up to +2,816% in as little as 10 months.

In short, when the world is clamoring for something and there isn’t enough to go around, prices soar… and investors can make a killing in a hurry.

With this in mind, I’ve spent the last several months researching the three most crucial supply demand crunches on the planet, and in the coming days I’ll share my findings with you in a special online presentation.

Posted in Uncategorized | Leave a comment

Chaos, $158 Oil, and The Kingdom Can’t Help

Chaos, $158 Oil, and The Kingdom Can’t Help

By Christian A. DeHaemer | Wednesday, March 2nd, 2011

Editor’s Note: With oil over $100 per barrel, there’s no reason you shouldn’t be profiting from energy stocks. The entire sector is marching higher. To help you do that, today we have a special oil edition — something that would typically run in our sister publication, Energy & Capital.


Brian Hicks, Publisher


Oil jumped 7.5% last week to hit its highest point in more than almost three years.

Brent crude is pushing $120. Texas is closing the gap, breaking $102.

Libya is the world’s 12th biggest exporter of oil and has cut 400,000 barrels a day from its 1.6 million bpd output, according to Reuters.

But the CEO of ENI, the blue chip Italian oil company, says the loss is much higher… and that the market is missing 1.2 million barrels.


Much of Libya’s oil producing regions in the east are in rebel hands, and Gaddafi continues his hardcore attacks on protesters.

Goldman Sachs must be long oil, saying “the spread of unrest to another producing country could create severe oil shortages and require demand rationing.”

The Saudis won’t save us

Traditionally, Saudi Arabia has claimed it has an extra four million bpd of spare capacity. And during the current crisis, they’ve stated they will be able to supply enough oil to make up the difference in Libya…

It won’t happen.

First of all, it is a well-known secret that Saudi Arabia has been overstating its reserves for years. Energy & Capital Editor Keith Kohl has covered the Saudis’ potential shortfall in depth.

Furthermore, King Abdullah is 86 years old and just returned home on Wednesday from a three-month medical leave. He is out of touch with the realities on the street.

The King recently announced he will give out $37 billion in new raises and other benefits to government workers in a clear bribe to keep his throne.

At the same time, there is a Facebook campaign pushing for a “day of rage” on March 11th. The protesters are seeking greater political freedom, rights for women, and a release of political prisoners.


“It Could Single-Handedly Crash Energy Prices!”

— Jim McAndrew, Energy Analyst

Within the scope of a few months, a tiny energy company debuted a technology that could very well bring natural gas and oil prices down to 1990s levels, set up manufacturing agreements across the planet, and is preparing to fulfill billions of dollars’ worth of contracts.

Before the share price doubles again, find out here how this rare outfit could radically alter our planet’s energy landscape.

The demand side

All of this chaos is going on in a world where the demand for energy is growing at twice the speed of IEA predictions.

China alone added a million barrels a day to demand last year, which currently stands at 87 million bpd globally. It is expected to hit 89 million bpd by the end of 2011.

Where this oil will come from is unknown, as four million bpd are going offline due to lower production of old wells…

Even if Saudi Arabia can pump to its full claimed capacity of 12.5 million bpd, it won’t be enough to cover the spread.

The Sharia don’t like it

Recent Wikileaks documents stated Saudi Arabia is just able to produce between eight and nine million bpd.

Russia is now the world’s largest exporter of oil.

The upshot of all this is that the Kingdom can’t prevent oil prices from going up even in a recession.

It won’t be able to supply more oil to cover growing demand from a resurging global economy, nor can it make up the difference from Libyan supplies.

On top of that, you have a great number of young, unemployed, and bitter people who are of Shiite heritage. Giving well-connected civil workers more money won’t suppress this group’s anger; they are alive at the margin.

The end around…

The obvious way to play the new rise is oil is to avoid the companies with a large presence in the Middle East — like Shell and ENI — and look for those that can supply oil to Europe and China without dealing with that part of the world.

This group includes Dragon Oil (DGO.L), which gapped up on the Libya news.

Dragon has more than 600 million barrels of oil in the Caspian Sea and Turkmenistan (as well as some in Yemen), and more than 3 trillion barrels of natural gas equivalent.

Dragon OIl

Another way to play it is to buy the Brent Crude ETF (NYSE: BNO), which I mentioned last week. The stock is up 10% since then.

The most profitable way to play the supply disruptions in oil is to buy exploration companies — like the one I’ve been talking about in Mongolia — with up to 612 million barrels of oil. It’s up more than 900% since last year and will resume drilling in about a month.

Or buy Uranium companies, whose prices will continue to go up as new electric demands push nuclear power over conventional hydrocarbons.

As clear a trade as there is

There are several things I know with a high degree of confidence about this market: energy demand will continue to grow; supply is constrained and subject to shocks; and money supply is growing at a record pace globally.

You should be heavily invested in energy exploration companies. That’s where the winners will be found in 2011.

Don’t miss the next wave…

All the best,

chris sig

Christian DeHaemer
Editor, Energy & Capital

Posted in Uncategorized | Leave a comment