SYDNEY: Philippine Airlines, which has been reporting losses on its New York route, expects cost efficiency to improve on long-haul flights after it switches to the fuel-efficient Airbus A350-900 in October, its chief executive said.
The new airplane will allow it to fly non-stop on long routes, a feature business travelers favor.
The company currently uses Boeing Co’s 777 to fly to New York, with a stop in Vancouver, Canada, CEO Jaime Bautista said at the annual meeting of the International Air Transport Association (IATA) in Sydney on Tuesday.
“That is why the profitability is not good but at least we are recovering all direct operating expenses,” he said, adding the company’s daily flights to London were not as profitable as he would like and the company was looking at the possibility of replacing those flights with the A350 as well.
While there is demand for long-haul flights as more Asians travel to Western countries, gas guzzling aircraft are a problem with oil at more than $70 a barrel after years of cheap fuel, and rising labor and infrastructure costs.
Airline companies including Singapore Airlines, Australia’s Qantas Airways Ltd. and US-based United Continental Holdings Inc. are adding ultra-long haul flights that can charge an airfare premium of around 20 percent versus flights that have one or more stops.
Last week, Singapore Airlines said it would launch the world’s longest commercial flight in October, a near-19 hour non-stop journey from Singapore to the New York area.
On this route, the airline is likely to fly the Airbus A350-900ULR, an ultra-long range version of the fuel-efficient twin-engine A350 jet.
Singapore Airlines, however, operates in a stronger business travel market than regional rivals Philippine Airlines and Vietnam Airlines JSC, which in February said long-haul flights are more an obligation than an option as the country’s flag carrier.
Philippine Airlines will take delivery of 15 planes this year, including the Airbus 321neo, to fly non-stop from Manila to Brisbane, Australia and to Mumbai and New Delhi in India, Bautista said.
The company said last month it was seeking regulatory approval for an increase in fuel surcharge to counter the higher fuel costs and a weak peso, after a 36 percent jump in fuel costs wiped out annual profits.
Airline executives meeting in Sydney this week said the industry’s profitability was being threatened by fuel costs that were rising faster than ticket prices, prompting some to lock in fuel hedges, lower capacity and raise fares.
Philippine Airlines expects to be more cost efficient on long-haul flights
Philippine Airlines expects to be more cost efficient on long-haul flights
- The company currently uses Boeing Co’s 777 to fly to New York, with a stop in Vancouver, Canada
- Philippine Airlines will take delivery of 15 planes this year, including the Airbus 321neo, to fly non-stop from Manila to Brisbane, Australia and to Mumbai and New Delhi in India
Saudi domestic tourism driving travel sector growth, Almosafer CEO says
RIYADH: Saudi Arabia’s domestic tourism is fueling a significant expansion in the Kingdom’s travel sector, with domestic bookings now making up over 40 percent of Almosafer’s overall travel market, according to CEO Muzzammil Ahussain.
This growth is underscored by a 45 percent year-on-year increase in domestic flight bookings in 2024, alongside a 39 percent rise in room night bookings, according to Almosafer’s latest travel trend report, released during the third Saudi Tourism Forum held in Riyadh.
The surge is linked to the country’s expanding tourism offerings and enhanced connectivity through low-cost carriers, with family and group travel seeing a particular boost, rising over 70 percent, the report added.
“The country has invested heavily in creating offerings and events to support domestic tourism,” Ahussain told Arab News on the sidelines of the event. “We see continued strength and sustainability in this, so we remain focused on domestic tourism.”
Almosafer, a Saudi travel company and part of Seera Group, is benefiting from this trend as domestic tourism becomes more sustainable. “In the report, over 40 percent of all of our bookings are now domestic,” Ahussain explained. “That doesn’t mean international travel is slowing down; overall travel is growing.”
He said flight prices dropped 7 percent year on year, prompting higher spending in destinations. “People are spending more on hotels, staying longer, and spending on experiences and events,” Ahussain said. “So overall, total spend is increasing.”
Despite the growth, challenges remain. Almosafer CEO said that the limited hotel supply during peak times, such as Riyadh season, leads to higher rates and makes it difficult for travelers to find accommodations.
“We’ve already seen a number of initiatives to improve hotel capacity and rooms across the country,” Ahussain said, adding that such improvements would make domestic tourism more attractive at all levels, from luxury to economy.
The company’s ongoing efforts to enhance partnerships with regional authorities and airlines are also key to this growth, and Almosafer said it collaborates closely with the Saudi Tourism Authority and regional bodies like the Aseer Investment Authority.
“We’ve had a number of signings at the Saudi Tourism Forum with different authorities from around the country to promote and market key destinations,” he added.
Ahussain also highlighted the strong partnerships Almosafer has with low-cost carriers like flynas and flyadeal, as well as its new partnership with Riyadh Air, which is set to launch later in 2025.
Looking ahead, Ahussain is optimistic about the impact of global events, such as Expo 2030 and the 2034 FIFA World Cup, on the Kingdom’s tourism sector. “These projects and events, as we saw with Expo 2020 Dubai, help build a brand for a city or country, and that brand creates awareness,” Ahussain said.
He continued: “When people come, whether domestically or internationally, we are working to build a foundation that supports them throughout their travel — before, during, and after these events.”
Almosafer is also preparing for an initial public offering as part of its long-term strategy, with a target IPO date in 2025 or 2026.
“In November 2023, Seera Group announced that Almosafer would be targeted for an IPO in two to three years,” he said.
“We’re still on track with that plan and working toward it.”
With domestic tourism growing rapidly, Almosafer is enhancing its digital offerings through partnerships aimed at streamlining travel services.
During the forum, Almosafer signed a memorandum of understanding with the Saudi Tourism Authority to integrate digital platforms, enhancing access to travel services.
Ahussain explained that the partnership also aimed to improve Sara Al, the smart guide for Saudi tourism, by adding booking services for flights and accommodations.
Egypt’s inflation drops to 23.4% in December amid falling food prices
- Banking sector shows strong resilience with record capital adequacy
RIYADH: Egypt’s annual inflation rate slowed to 23.4 percent in December 2024, down from 25 percent in November, according to figures from the Central Agency for Public Mobilization and Statistics.
The consumer price index for the country stood at 239.7 points in December, reflecting a deceleration largely driven by a drop in food prices.
Key food categories saw notable price decreases, with vegetables falling by 14 percent, dairy products, cheese, and eggs decreasing by 0.7 percent, fish and seafood dropping by 0.6 percent, and meat and poultry experiencing a slight reduction of 0.1 percent.
However, other sectors showed price increases, putting upward pressure on the overall inflation rate.
For example, telephone and fax services surged by 11 percent, fruit prices rose by 7.5 percent, and medical products, devices, and equipment saw a 5.5 percent increase.
Other notable price hikes included postal services (up 3.6 percent), hotel services (up 3.2 percent), and recreational and cultural services (up 2.8 percent).
Meanwhile, costs for telephone and fax equipment grew by 2.6 percent, while actual housing rentals increased by 1.6 percent. Hospital services saw a rise of 1.4 percent, with furniture, carpets, and floor coverings up by 1.3 percent.
Smaller price increases were recorded in oils and fats, electricity, gas, and fuel materials (up 0.7 percent), transportation services (up 0.5 percent), and basic foodstuffs like grains and bread (up 0.3 percent). Sugar and sugary foods, as well as private transportation costs, also saw slight increases of 0.2 to 0.3 percent.
Banking sector
Egypt’s banking sector continues to demonstrate stability and resilience, playing a vital role in maintaining the country’s economic, financial, and monetary stability, according to the Central Bank of Egypt’s latest Financial Soundness Indicators.
The sector’s capital adequacy ratio reached 19.1 percent by the end of Q3 2024, comfortably surpassing the regulatory minimum of 12.5 percent. This marks a 0.5 percent improvement from the previous period, highlighting the sector’s growing financial health.
In terms of asset quality, nonperforming loans represented just 2.4 percent of total loans, with provisions coverage for these loans standing at a strong 87.4 percent.
Liquidity levels remained robust, with local currency liquidity at 32.1 percent and foreign currency liquidity at 77.7 percent, well above the regulatory requirements of 20 percent and 25 percent, respectively.
The banking sector’s loan-to-deposit ratio was recorded at 61.3 percent by the end of Q3 2024, reflecting conservative lending practices. Meanwhile, profit margins remained impressive, with a return on equity of 32.2 percent for the 2023 fiscal year.
Saudi Arabia’s flynas begins Jeddah-Djibouti flights; flyadeal launches 5 routes
RIYADH: Saudi low-cost airline flynas launched its first direct flight between Jeddah and Djibouti on Jan. 8, further expanding its network in Africa.
According to a press statement, the inaugural celebration was held at King Abdulaziz International Airport and was attended by Djibouti’s Ambassador to the Kingdom Dya-Eddine Said Bamakhrama and representatives from flynas and Jeddah Airport Co.
The inaugural flight was welcomed at the African country by Faisal Al-Qabbani, Saudi Arabia’s ambassador to Djibouti, and Hassan Humad Ibrahim, theDjibouti’s minister of infrastructure and transport.
The expansion is part of the airline’s “We Connect the World to the Kingdom” initiative and supports Saudi Arabia’s National Civil Aviation Strategy, which aims to expand connectivity to 250 international destinations and reach 330 million passengers.
The initiative is also expected to strengthen the Kingdom’s National Tourism Strategy, which aims to attract more than 150 million tourists by the end of this decade.
In the statement, flynas said it will operate three weekly flights from Jeddah to Djibouti.
Flyadeal launches five new routes
In a separate statement, Saudi low-cost airline flyadeal said that it launched five routes from its operating bases of Dammam, Riyadh, and Jeddah, marking the start of a major expansion drive that includes entry to Pakistan next month.
According to the statement, the routes include 14 domestic flights a week from Dammam to Najran, Tabuk, and Yanbu.
The airline said that it launched flights from Riyadh and Jeddah to the Jordanian capital, Amman, with a total of 10 flights a week.
The statement added that preparations are also underway for the start of twice-weekly flights to Pakistan’s financial capital, Karachi, from Riyadh and Jeddah, effective Feb. 2.
“Expanding our domestic and international networks has been the focus of our planning team in recent months to provide leisure and business travelers with more choice, options and more importantly, greater air connectivity,” said Steven Greenway, CEO of flyadeal.
He added: “As more aircraft join flyadeal’s fleet during 2025, we will continue to inject additional capacity into our three bases with new routes and extra frequencies, part of a system wide expansion plan over the next 12 months.”
Launched in 2017, flyadeal currently serves almost 30 year-round and seasonal destinations in Saudi Arabia and selected Middle East, European, and North African cities. The airline operates a fleet of 36 Airbus A320 narrowbody aircraft.
Oil Updates — crude prices steady as winter fuel demands balance US fuel inventories activity
SINGAPORE: Oil prices were little changed on Thursday, with investors weighing firm winter fuel demand expectations against large builds of fuel inventories in the US, the world’s biggest oil user, and macroeconomic concerns.
Brent crude futures fell 6 cents to $76.1 a barrel by 10:27 a.m. Saudi time. US West Texas Intermediate crude futures fell 5 cents to $73.27.
Both benchmarks fell more than 1 percent on Wednesday as a stronger dollar, and the bigger-than-expected rise in US fuel stockpiles weighed on prices.
“The oil market is still grappling with opposite forces — seasonal demand to support the bulls and macro data that supports a stronger US dollar in the medium term ... that can put a ceiling to prevent the bulls from advancing further,” said OANDA senior market analyst Kelvin Wong.
JPMorgan analysts expect oil demand for January to expand by 1.4 million barrels per day year-on-year to 101.4 million bpd, primarily driven by “increased use of heating fuels in the Northern Hemisphere.”
“Global oil demand is expected to remain strong throughout January, fueled by colder-than-normal winter conditions that are boosting heating fuel consumption, as well as an earlier onset of travel activities in China for the Lunar New Year holidays,” the analysts said.
The market structure in the Brent futures is also indicating that traders are becoming more concerned about supply tightening at the same time the demand is increasing.
The premium of the first-month Brent contract over the six-month contract reached its widest since August on Wednesday. A widening of this backwardation, when futures for prompt delivery are higher than for later delivery, typically indicates that supply is declining or demand is increasing.
Nevertheless, official Energy Information Administration data showed rising gasoline and distillates stockpiles last week in the US.
The US dollar firmed further on Thursday, underpinned by rising Treasury yields ahead of US President-elect Donald Trump’s entrance into the White House on Jan. 20.
Looking ahead, WTI crude oil is expected to oscillate within a range of $67.55-$77.95 into February as the market awaits more clarity on Trump’s administration policies and fresh fiscal stimulus measures out of China, said OANDA’s Wong.
Saudi Industrial Production Index up 3.4% as output expands: GASTAT
RIYADH: Saudi Arabia’s Industrial Production Index climbed 3.4 percent year on year in November to reach 103.8, driven by an uptick in mining and quarrying activities, official data showed.
According to data from the General Authority for Statistics, the mining and quarrying sub-index recorded a 1.2 percent annual rise, underpinned by a modest increase in the Kingdom’s oil output, which grew to 8.93 million barrels per day in November from 8.82 million bpd in the same month of the previous year.
Manufacturing activities also showed robust growth, expanding 7.2 percent year on year, driven largely by a 17.6 percent surge in the manufacture of coke and refined petroleum products. Additionally, the production of chemicals and chemical products rose 1.6 percent, while food manufacturing increased by 1.5 percent during the same period.
This comes as Saudi Arabia emphasizes industrial production under Vision 2030, aiming to diversify its economy and reduce oil dependence by fostering growth in mining, manufacturing, and other non-oil sectors.
The report noted a mixed performance in other sectors. The sub-index for electricity, gas, steam, and air conditioning supply fell by 2.1 percent year on year, while water supply, sewerage, waste management, and remediation activities surged 10.5 percent.
The index for oil activities rose 3.8 percent in November compared to the same month in 2023, reflecting the increased output in the Kingdom’s mining sector. Meanwhile, non-oil activities grew 2.4 percent, buoyed by gains across most non-oil economic activities, except for the electricity and utilities sector, which posted declines.
Despite the annual growth, the IPI fell 2.3 percent in November compared to October 2024. Mining and quarrying activities declined 0.5 percent month on month, while manufacturing contracted by 3.1 percent over the same period.
The electricity, gas, steam, and air conditioning supply sub-index posted a steep 21.5 percent monthly drop, and water supply, sewerage, waste management, and remediation activities decreased by 4.7 percent.
Oil activities fell by 2.1 percent month on month, while non-oil activities recorded a 2.7 percent decline in November compared to October.
The mixed performance highlights the volatility in industrial activity, but the overall annual growth underscores progress in Saudi Arabia’s ongoing efforts to diversify its economy and reduce dependence on oil revenues.
