AirAsia deepens the mystery

AirAsia deepens the mystery by Scott Rochfort

Qantas and Virgin Blue kept the market guessing over their low-cost
plans in Asia yesterday after Malaysian budget carrier AirAsia
dismissed talk it was planning to set up a Singapore-based airline
with Qantas.

Amid speculation both Australian airlines might still have an interest
in the planned sharemarket listing of AirAsia, chief executive Tony
Fernandes told a Malaysian newspaper: "We are talking to Qantas about
cheap fares."

But neither Mr Fernandes nor Qantas would explain exactly what this
meant.

Virgin Blue also declined to confirm an Asian Wall Street Journal
report saying the airline could buy a stake in AirAsia in coming
weeks.

"I'm only saying what I've been saying for three months and that is,
'Virgin Blue is in regular discussions with a number of airlines
around the world'," said Virgin's head of strategy, David Huttner.

"It has been long established that we've had talks with a variety of
South-East Asian airlines."

As rumours persisted that Qantas was even looking at taking a stake in
the Singapore-based Valuair, some analysts expressed scepticism over
the mixed signals over Qantas and Virgin's plans in the region.

Qantas has plenty on its plate with the upcoming launch of Jetstar and
the multibillion-dollar upgrade of its ageing fleet, while analysts
questioned whether Virgin Blue had enough funds to expand outside
Australia.

AirAsia also appointed Credit Suisse First Boston and RHB Sakura
Merchant Bankers as the book-runners for its planned float, which is
valued as high as $1.3 billion.

AirAsia said in a statement: "The IPO strengthens our balance sheet,
further cuts our existing low costs at US2.5c per ASK [available seat
kilometre] and accelerates our growth plans throughout Asia."

But the airline would not give further details of its IPO.

Air New Zealand, meanwhile, announced it was increasing its weekly
trans-Tasman flights from 116 to 125.

But the airline denied the extra six flights from Brisbane and
Melbourne to Christchurch were aimed at the Virgin offshoot Pacific
Blue, which flies on the routes.

Air NZ's general manager for Australia, Michael Reed, said the airline
was responding to higher load factors across the Tasman, where Air NZ
had enjoyed a 15 per cent lift in passenger numbers since introducing
its no-frills Tasman Express service last year.

Despite the estimated 30 to 40 per cent lift in seat capacity over the
Tasman since the entry of Emirates Airlines last August, Mr Reed said
Air NZ was still enjoying average load factors well above 70 per cent.

"Our current load factors out of Melbourne [to Christchurch] are very,
very solid," he said. ####
--multiplaza.nl.nu--