ARC NEWS
JAL and Malaysia Airlines set to receive nod to extend JV
March 29, 2023
The Malaysian Aviation Commission (MAVCOM) has proposed extending an exemption on the joint venture between Japan Airlines and Malaysia Airlines on routes between Japan and Malaysia. The joint venture allows the two airlines to coordinate in a number of areas, including scheduling, sales and inventory management, on a metal-neutral basis. MAVCOM notes that it only covers the mainline services of the two airlines, plus JAL subsidiary J-Air, but excludes their other subsidiaries. In the draft decision, the regulator notes that while JAL and Malaysia Airlines are the dominant carriers on many routes between the two countries, there was still enough competitive pressure being exerted by competitors and carriers offering viable one-stop services to ensure that continuing the joint venture would not impact consumers. MAVCOM has invited written feedback on its draft submission, which must be submitted by 10 April Once the consultation period closes, MAVCOM is expected to issue its formal exemption soon after. Networks data shows that in April JAL will operate solely on the Kuala Lumpur – Tokyo Narita route, while Malaysia Airlines flies from Kuala Lumpur to Narita, Tokyo Haneda and Osaka Kansai, as well as Kota Kinabalu-Narita. AirAsia X, All Nippon Airways and Batik Air Malaysia are the other carriers that fly between Malaysia and Japan.


Kenya Airways 2022 results affected by forex losses
March 29, 2023
Kenya Airways reported a revenue of KSh117 billion ($889 million) in 2022, up 66% year on year, driven by a significant increase in passenger numbers, but foreign exchange losses due to the ongoing financial restructuring programme affected the performance. The revenue is 5% below the pre-pandemic reported revenue, indicative of the group's projected recovery by 2024, it says in a release. Passenger numbers grew by 68% to 3.7 million. The airline boosted capacity, as measured in available seat-kilometres by 75%. As a result, passenger load factor for 2022 was only 3.9 percentage points below the load factors achieved before the pandemic in 2019. Group managing director and chief executive Allan Kilavuka states: "The airline recorded forex losses occasioned by the restructuring of the guaranteed government of Kenya loans as part of the ongoing financial restructuring programme, negatively impacting the income statement by KSh26.4 billion. If you remove the impact of the forex losses and the abnormal fuel cost increase at 160%, we would have made an operating profit. We are on course to turn around the business by 2024." Kenya Airways Group chief financial officer Hellen Mathuka said the devaluation of the shilling and abnormal increase in fuel cost increased the cost of operations, negatively impacting overall financial results. Mathuka, adds: "Our overheads increased by 31% due to foreign currency losses driven by the weakening of Kenya shilling against major world currencies and the abnormally high cost of aviation fuel during the year. As a result, the group's total operating costs increased by 59%, with direct operating costs increasing by 93%, mainly driven by increased operations and a huge increase of 160% in the cost of global fuel prices throughout the year. In addition, the fleet ownership costs increased by 6% driven by the provision for early aircraft returns." Over the next five years, the airline will continue to diversify its revenue streams. The target is to grow the cargo business to contribute 20%, up from 10% at present, it says. Kilavuka adds: "The debt restructure process is ongoing and includes restructuring the government guaranteed debt. As a result, there is a charged finance cost of KSh18 billion in our 2022 income statement."


​Croatian airports join Schengen free-travel zone
March 28, 2023
Croatia's airports have become members of the Schengen passport-free travel zone, enabling the country to classify most European flights as domestic. The Balkan nation joined the Schengen zone on 1 January, abolishing land and sea borders, but checks remained at airports until 26 March. "As of today, the Schengen travel regime has also become valid in air traffic between Croatia and the Schengen signatory countries, which makes Croatia Airlines' previous international flights domestic flights within Europe and thus makes travel faster and more flowing," states the flag carrier. Likewise, Zagreb airport says the changes should make it faster and easier for visitors to travel to the country. It means that air passengers arriving in Croatia from fellow Schengen member countries will be treated as domestic arrivals and exempted from border controls.


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