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Oil price falls on OPEC decision to increase production by 1,000,000 barrels a day, as Venezuela, Libya and Iran struggle to return to their glory days of production, which is all good news for Russia and OPEC, while the US shale producers are surging forward as oil exports from the US grow and compete with Russia and OPEC which is bad news for them. Is it finally time to break the grip of the OPEC cartel? which is technically illegal as it fixes prices, but till now no one has dared to challenge OPEC on its price fixing business model. Lastly, oil speculation significantly raises the volatility and price of oil, time to shut that down, as many rich and powerful make huge profits from oil speculation, hurting consumers and industries around the world.

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Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   June 28, 2018       Tomas’ Comment:   Oil prices are heading back up, which is bad news for airlines, but airlines have done well with newer technology aircraft the last 18 years and as you see in the graph below, roughly a 40% … Continue reading →

Summary: The airline received $US 72.8m since January, 2017 and had an operating loss of $25.3 million in 2017 and in that 18 months it has burned it all away with a small fleet (3 x ERJ-145, 2 x E190). Now its raising at least $US 10m in new capital from existing and new investors and is adding $14m in new debt ($2.0m from SSCH Africa Holding and a $12m loan from shareholder Solenta Aviation). The airline offers very cheap tickets with yields so low it still bleeds cash with a good 71% load factor. Airlines cannot offer low yield ($/PRK) ticket prices when their unit costs per ASK are high, you need to be a real low cost airline to offer real low fares, or you go bust! Lastly, new direct competition is emerging for Fastjet in its markets, from Tanzania, Mozambique to Zimbabwe, and things will only get tougher with time, can’t make money in 2018, then when?

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Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Fastjet to raise capital – Airline Ecomics Daily – JUne 29, 2018     Tomas’s Comment:   Time for a reality check? the airline lost $US 63.9m in 2016 (-48% operating loss margin), it lost $US 25.3m in 2017 when it received $US 72.8m in … Continue reading →

Fastjet hits back at media for being to harsh on it, yet while no one can be as bad as Fastjet was in 2016, with an operating loss of $US 63.9m (yes, -48% operating loss margin) operating 3 x A319’s, things have not changed much since August 1, 2017. The airline received $US 72.8m in new investment in 2017 and had an operating loss of $25.3 million and in that 18 months it has burned it all away with a smaller fleet (3 x ERJ-145, 2 x E190)? yes it reduced expenses, off course with smaller aircraft, but burning cash at $4.0m a month one has to really ask is this ‘new’ business model any better? as load factor is 71% and revenue per seat of just $60.90 means its yield is way too low, again another carrier offering LOW FARES, but NOT a LOW COST CARRIER! and PRASK is well below CASK, and they want more money? seriously?

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Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/       Tomas’ Comment: They can paint a rosy picture, but it has been under a turnaround since August, 2016, so 22 months of restructuring they should be further along in their recovery, but they are not and yes they have down-gauged to much smaller … Continue reading →

Air Transat to lease seven new A321neos from AeCap for delivery between 2010 and 2022 to replace its A330’s to lower costs per seat.

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Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/     Airline Economics Daily – June 28, 2018     Air Transat has signed an agreement with AerCap for the long-term lease of seven new Airbus aircraft: two A321neos and five A321neo LRs (long-range). These aircraft will be delivered gradually between 2020 and 2022 and … Continue reading →

Start-up Vietnamese airline, Bamboo Airways, has committed to purchasing 20 787-9 Dreamliners and 24 x Airbus A321neo’s back in March. The airline will be up against state owned and soon to be 49% privatized Vietnam Airlines with 83 aircraft and 28 on order, LCC VietJet Air with 55 aircraft and 179 on order and lastly Jetstar Pacific with 19 aircraft, if all airlines take their orders, Vietnam should have 4 airlines operating a total of 408 commercial jet airliners by +/- 2024, that is going to be a highly competitive market for sure.

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SEE:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Airline Economics Online- June 27, 2018       Tomas’s Comment:   Bamboo Airways, is a startup airline by a Vietnamese construction company, FLC Group. It will start in late 2019? and will serve destinations where FLC Group has heavily invested in tourism infrastructure, as well as other secondary domestic routes.   … Continue reading →

SUMMARY: NO surprise! Fastjet of South Africa is on the brink of failure, without a cash immediate injection, as cash on hand is down to $US 3.3m, this airline’s LCC business model with A319’s was broken for years, then they abandoned the model for regional jet flying with 3 x ERJ-145’s and 2 x E190’s. With operations in Mozambique (under Solenta Aviation Mozambique), South Africa (“branding licence”? with Federal Airlines), Tanzania (Fastjet Tanzania 49% owned) and in Zimbabwe (FastJet Zimbabwe 49% owned) and still cannot make money, share price fell 70% today, and yet still the airline is valued at $US 29m seriously?

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SEE:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Fastjet warns it cannot continue without equity raising Airline Economics Daily – June 27, 2018 Tomas’s Comment: This is a sad story, the LCC model was a disaster, in 2016 it lost $US 48m on $US 68.5m in revenue? a -70% loss margin? what kind of business is that? They found a … Continue reading →

SUMMARY: The 2nd last multi-national owned airline left in the world, SAS Scandinavian Airlines, the state carrier of Sweden, Norway and Denmark since 1951, is about to lose Norway as its shareholder, as it is selling the last of its 9.88% of the airline (down from the original 14.3%). Multi government airlines don’t work, from Air Afrique, Gulf Air, MSA, East African Airways to LIAT, they served their purpose but now its time for owners to go their own way, state owned airlines are hard to run imagine 11? it is time for that business model to be put to rest.

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SEE:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   June 26, 2018 – Airwise Norway has announced it will sell its remaining shares in flag carrier SAS Scandinavian Airlines.   The Norwegian Ministry of Trade and Industry on Tuesday launched the sale of its remaining 37.8 million shares, representing 9.88 percent of the airline.   Norway originally held a 14.3 percent … Continue reading →

Warning: Airline Crew Appear To Get Cancer More Than The Normal Population

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SEE:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Aliyah Kovner-27 JUN 2018   Flight attendants have a tough job. On top of the psychological strain from having to deal with some truly ill-behaved customers, crew members face numerous physiological hazards in the form of frequent circadian rhythm disruptions, breathing poor-quality recycled air, and exposure to ionizing radiation from spending so … Continue reading →

SUMMARY: The Chairman of the Republic of China (ROC) (aka Taiwan) based Daily Air, has been detained over fraud. It is alleged the airline created fake invoices to get more state subsidies, and at this point no word if there was any ‘irregularities’ with the recent acquisition of 4 x DHC-6 Series 400’s from Viking Air which has a value of $US 30 million. The airline flies into the highly volatile and politicized islands of Penghu, Kinmen, and Matsu, which are claimed by the Peoples’ Republic of China (PRC) which considers the islands and Taiwan, its territory, and makes no bones about the fact the ‘renegade’ province will one day be part of the PRC again, ideally peacefully but by military force if need be. The ROC is now, sadly down to just 17 UN member states that recognize it over the PRC out of 193 UN member states, the tide is turning against Taiwan and its once big aspirations of full independence.

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SEE:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   Head of Taiwan’s Daily Air detained over fraud June 21, 2018 Daily Air’s new Viking Air DHC-6 Series 400 Twin Otter     The Chairman of Daily Air Corporation (4 x DHC-6 Series 400 from Viking Air and 2 x Do228-212), a state-subsidized domestic airline, serving several of the offshore islands of … Continue reading →

Bahamas Government has stated its commitment to ratify Cape Town, plans enhanced aircraft register to compliment is ship and yacht registries

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SEE:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/   CorporateJetInvestor – Alud Davies June 18, 2018   A Bahamian registered (C6-IRM) IAI 1124 Westwind II business jet     The Bahamas debates it’s next fiscal budget it has stated its commitment to ratify the Cape Town Convention and is moving towards enhancing its aircraft register with a view to competing with other … Continue reading →

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