Airlines

Japan Airlines counts the cost of Tokyo crash

Published

5 months ago

March 29, 2024

Admin

Japan Airlines counts the cost of Tokyo crash, Flights at Tokyo Haneda airport continue to experience disruptions following a fatal collision between a Japan Airlines aircraft and a smaller plane on the runway. The incident, resulting in five fatalities, prompts investigations by transport authorities to prevent such tragedies in the future.

Market Fluctuations Post-Accident

Upon the reopening of markets after Japan’s New Year’s holidays, Japan’s second-largest airline, Japan Airlines, witnessed a surge in sell orders. Despite the initial setback, the share price managed to recover by the end of the trading day.

Financial Impact and Insurance Coverage

Japan Airlines updated investors, highlighting the coverage of the loss of the Airbus A350 aircraft through insurance. However, additional costs are anticipated, including offering ticket refunds to customers with reservations through March 31, 2023, who wish to cancel their flights. The estimated operating loss for the airline stands at approximately ¥15 billion ($105 million), a significant challenge considering the airline’s recent recovery from pandemic-related losses.

Short-Term Setbacks, Long-Term Resilience

The tragic incident is expected to impact the airline’s earnings for the year to March. Despite this setback, JAL’s longer-term prospects appear resilient. While airline demand in Asia has lagged behind the US and Europe post-pandemic, JAL’s full-service flights have already seen passenger revenue return to pre-pandemic levels. Operating margins have improved, thanks to price hikes and a substantial increase in the average revenue earned per passenger kilometer flown.

Growth Expectations and Market Outlook

Shares of Japan Airlines currently trade at 12 times forward earnings, a premium compared to US peer United Airlines. This reflects positive growth expectations and suggests that the market anticipates the airline’s resilience in the face of short-term challenges.

Conclusion

Despite the immediate challenges posed by the Tokyo crash, Japan Airlines remains steadfast in addressing the incident’s aftermath. The airline’s financial resilience and positive market outlook indicate a potential recovery and continued growth, emphasizing its commitment to passenger safety and long-term success.

Airlines

A Manufacturing Branch Could Be Opened By Turkish Airlines

Published

3 months ago

June 12, 2024

Admin

A Manufacturing Branch Could Be Opened By Turkish Airlines. Turkish Airlines (TK), headquartered in Istanbul, is embarking on an ambitious plan to bolster Türkiye aeronautical industry and alleviate global supply chain challenges. According to a report by Bloomberg, the airline aims to augment its aircraft component manufacturing business, selling parts to other carriers while forging partnerships with industry giant Boeing.

This strategic move seeks to domestically produce seats and engine components, tapping into Türkiye potential capacity to provide a reliable source of supply amidst industry-wide delays and the need to extend the lifespan of older aircraft models.

Turkish Airlines Chairman Vision

Ahmet Bolat, Chairman of Turkish Airlines, expressed optimism about the potential collaboration with Boeing, emphasizing the mutual benefits it could yield. Bolat highlighted that leveraging Türkiye’s manufacturing prowess could address the pressing supply chain demands faced by Boeing and the aviation industry as a whole.

Ongoing Negotiations And Strategic Orders

Negotiations between Turkish Airlines and Boeing are in an advanced stage, with the airline eyeing a substantial aircraft order. This development comes in the wake of Turkish Airlines’ previous agreement with Airbus for 220 aircraft, underlining its commitment to fleet modernization and strategic growth. Chief Financial Officer Murat Şeker reiterated the significance of these orders in securing the airline’s future growth prospects during an annual investor call.

Current Fleet And Future Expansion

Turkish Airlines currently holds orders for 292 aircraft, comprising a mix of Airbus A321-200NX, A350-1000s, A350-900s, A350Fs, and Boeing 787-9s. While negotiations with Boeing progress, discussions with engine manufacturer CFM International have encountered challenges, primarily concerning pricing disputes, as reported by Swiss aviation news outlet AeroTELEGRAPH.

Future Prospects And Fleet Dynamics

Although Turkish Airlines recently opted for Airbus A350 aircraft, the possibility of incorporating Boeing B777X remains open for future considerations. Despite the existing order, the airline remains flexible in its fleet expansion plans, indicating potential avenues for collaboration beyond its current commitments.

Conclusion

Turkish Airlines strategic initiatives to expand its aircraft component manufacturing business signify a significant step towards invigorating Türkiye aeronautical industry and addressing global supply chain bottlenecks. With ongoing negotiations with Boeing and a robust order backlog, the airline is poised to fortify its position in the aviation market while contributing to Türkiye’s industrial growth trajectory.