Recovery in Europe will benefit Asia Pacific carriers

IT looks like the good times are finally rolling back. Or so, at least in Europe.

Courtesy British Airways

Courtesy British Airways

The International Airlines Group (IAG) which owns British Airways, Iberia and budget carrier Vueling swings back into the black with a profit of 527m euros (US$728m) in 2013 compared to the loss of 613m euros last year. Mr Walsh said: “In 2013, we strengthened the group by acquiring Vueling, embarking on Iberia’s transformation and enhancing British Airways’ revenue performance.”

Although Iberia incurred a loss, it made “huge progress” according to Mr Walsh. He said: “Recent pay and productivity agreements between Iberia and its pilot and cabin crew unions are key to reducing the airline’s costs further and providing the foundation for profitable growth.”

Courtesy SkyTeam Cargo

Courtesy SkyTeam Cargo

It is also good news for Air France/KLM which posted a profit of 130m euros in 2013, reversing the loss of 1.22bn euros in 2012 attributed to stringent cost and staff reductions. Chief executive Alexandre du Janiac said: “We are clearly benefiting from the successful implementation of new working conditions and of the industrial plans adopted in all our businesses.”

However, things aren’t as rosy in Asia Pacific although Asia is supposed to be the most promising region for growth.

Courtesy Qantas

Courtesy Qantas

Qantas posted a loss of A$252 million (US$225) for the first half-year (Jul-Dec 2013), deepening the loss of A$91 million incurred last year. At the same time it announced axing 5,000 jobs as part of a three-year plan to reduce costs by A$2 billion. (See Qantas’ dismal performance: The Singer or the song, Mar 3, 2013) It looks like the Australian flag carrier is some steps behind Air France/KLM, but in reality it has embarked on a transformation program for some three years now. Qantas continues to struggle to avert what Mr Joyce once referred to as an Australian “tragedy”. He said: “We have already made tough decisions and nobody should doubt that there are more ahead.”

Courtesy Singapore Airlines

Courtesy Singapore Airlines

Singapore Airlines (SIA)’s profit for Q3 (Oct-Dec 2013) plunged 65 per cent from S$142.5m (US$112.4m) to S$50.1m the previous year. Unlike Vueling in the case of IAG, budget carrier Tiger Airlines, of which SIA owns 40 per cent, was a dent in the group’s profit, contributing to a loss of S$40.8m from associated companies. The parent airline’s profit, however, improved S$43m year-on-year, from $87m to S$130m. Looking ahead, SIA continues to be wary of the aggressive competition that it faces. It will be interesting to see how it will fare for the full year ending Mar 31.

One or two birds may not a season make. There is a silver lining in the grey cloud over Asia-Pacific as Europe recovers, especially for long haul carriers that include Qantas and SIA.

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About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran, author, editor and management consultant. Besides commentary on business issues and life-interest topics, travel stories and book reviews, genres include fiction, poetry and plays. Nature lover who abhors cruelty of any form to animals, and a tireless traveler. Above all, a dreamer.

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