Qantas Readies for Post-Pandemic Lift Off

Vol. 28 No. 2 April-May 2021 orientaviation.com

QANTAS READIES FOR POST-PANDEMIC LIFT OFF

Domestic business is booming, but it’s still wait and see for international travel says Qantas Group boss, Alan Joyce

[email protected] | +1 561.349.8950 | www.willislease.com CONTENTS Volume 28, Issue 2

COVER STORY 18 Recently retired International Air Transport 16 Association director general advocates more QANTAS GROUP aggressive emissions reductions for aviation READIES FOR 20 Greater Bay Airlines delays launch 21 Taiwan’s airlines having a better pandemic than

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Associate Editor & MAIN STORY Chief Correspondent 12 Momentum gathers for “vaccine passports” at Tom Ballantyne Asia-Pacific airlines Tel: +61 2 8854 1458 M: +61 4 1463 8689 E-mail: [email protected]

North Asia Correspondent Geoffrey Tudor Tel: +81 3 3373 8368 E-mail: [email protected]

Photographers Rob Finlayson, Graham Uden, Ryan Peters COVER PHOTO BY BRENDAN READ

Chief Designer Chan Ping Kwan COMMENT AIRCRAFT LEASING: ASIA-PACIFIC Printing 5 Lessors survival strategy honed by past crises UPDATE Printing Station (2008) 25 Bumpy business forecast for airline lessors ADDENDUM 26 Engine flight hours decline 50% during pandemic 6 New China Airlines boss: from flight attendant to 27 MTU rides wave of Asia-Pacific industry recovery ADMINISTRATION president General Manager AIRLINE TRAINING Shirley Ho 28 COVID-19 shaping innovation in airline pilot E-mail: [email protected] training

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The Americas / Canada Barnes Media Associates 6 Increasing evidence passengers are leap frogging Ray Barnes to digitilised air travel Tel: +1 434 770 4108 6 Australia and China rebound spurred by dynamic INDUSTRY ADDENDUM Fax: +1 434 927 5101 domestic market recovery 30 Global seat manufacturer reports 60% earnings E-mail: [email protected] 7 Incoming International Air Transport Association decline boss warns airports and ATMs against 30 Liebherr and AFI KLM E&M partner in China for opportunistic fee hikes component and MRO expansion Download our 2021 media planner at: 30 Fokker parent sells two subsidiaries to private orientaviation.com/advertising NEWS BACKGROUNDERS investor PANTA Holdings Follow us on Twitter @orientaviation 8 Korean Air president reveals details of Asiana 30 Singapore Airlines selects Salesforce to upgrade Airlines integration customer experience

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Lessors survival strategies honed by past crises

With around half the world’s airline fleet owned or managed will be on pause. Carriers burning through cash reserves and by leasing companies and a majority of them grounded for adding massive amounts of new debt to their balance sheets the past year or more it is hardly surprising some lessors will be shying away from ordering airplanes or adding leased have been struggling. But not all of them as the record jets to their fleets. revenue and big profits announced by Singapore-based BOC And, as they have been for the last year, they will be Aviation highlights. looking to defer lease payments and negotiate reductions on Major global leasing companies had a buoyant 2019 and rentals they have. It also is likely many carriers will not renew they were able to take advantage of bank debt and access aircraft leases expiring this year or even in 2022. to bond markets to navigate the COVID-19 crisis. Others, As a result, more disputes between airlines and lessors however, have not been so fortunate. about lease returns and redeliveries are ahead. Clearly, there The years leading to the outbreak of the pandemic were are those who will continue to prosper, such as BOC Aviation a golden period for aircraft lessors. Airlines, focused on and AerCap. Both companies have strong balance sheets and financial stability, gravitated to leasing large portions of their excellent management. fleets rather than owning them. In his first press conference as International Air Transport Dozens of new lessors entered the market, particularly in Association (IATA) director general, Willie Walsh said: China, as investors jumped at what was seen as a winning bet. “Generally, the leasing industry is competitive. There are lots For the time being, that boom has come to an end. Analysts of options out there for most if not all airlines and we continue forecast a thinning of lessor ranks. to see evidence of that. Already that prediction has come to pass with Dublin- “In many cases lessors have been part of the solution to based AerCap’s purchase of GE’s leasing arm, GECAS. It the cash crisis airlines faced in 2020.” See IATA boss warns appears inevitable the sector will continue to shrink, at least service providers against opportunistic fee hikes, page 7. in the near-term, as small lessors either depart the industry or A full recovery for the global airline industry, particularly are absorbed by larger, more successful peers. long-haul flying is forecast for 2024 to 2025. As a result, the With the time frame of recovery from the pandemic still road ahead for some aircraft and engine lessors, at least in the uncertain and forecast to take some time, airline fleet growth short to medium term, will be challenging. ■

TOM BALLANTYNE Associate editor and chief correspondent Orient Aviation Media Group

A trusted source of Asia-Pacific commercial aviation news and analysis

ORIENT AVIATION

APRIL-MAY 2021 / ORIENT AVIATION / 5 ADDENDUM AIRLINES AIRPORTS PEOPLE

China Airlines insider appointed president

Starting at China Airlines (CAL) acting president, until Kao was as a straight out of university appointed in mid-March. CAL flight attendant in 1986 and said Hsieh will now concentrate progressing through the ranks as full-time on chairing the carrier’s a CAL pilot and senior manager, board. the flag carrier’s new boss, One of Kao’s first public Shing-Hwang Kao, can rightly appearances as president claim to know the company was a sentimental occasion. inside out. He was among management, Appointed in March, Kao is a crew dressed in uniforms from CAL lifer with a deep knowledge different eras of 747 flying, of the airline, from both an A300 family and progressed to cabin crew operations. Most retired employees and valued operations perspective and the the 747-400 and the left hand recently, he was a CAL senior frequent flyers to farewell the last experience of dealing with the seat before being promoted vice president. 747-400 to depart the CAL fleet. challenges of management, most to CAL’s management ranks in Kao’s appointment will ease At the ceremony, on April latterly the pandemic. 2003. He also flew A340s and the workload of CAL chairman, 12, the former 747 captain said Kao moved from the A330s. His leadership roles Su-Chien Hsieh, who also has the aircraft “was a very safe and passenger cabin to the cockpit have included chief pilot, vice been serving as acting president stable aircraft to fly” and thanked after he was among the first president of flight operations for two years. Hsieh led CAL from the “Queen of the Skies’ for “its batch of CAL students to be sent and responsibility for the June 2016. In April 2019, he was extraordinary contribution to to the U.S. for flight training. He departments of finance, safety, chosen as CAL board chair but the development of Taiwan and began his flying years with the corporate sustainability and retained his responsibilities, as China Airlines”. ■

Direct bookings with carriers to climb to 55% after “lost year”

A recent survey commissioned industry, particularly in commercial 12% increase over 2020. Pre-pandemic, 26% of executives by technology solutions provider, processes, commerce and retailing “We view 2020 as being the considered it to be extremely Accelya, and published in early technologies. lost year for airlines, but far from important. By April this year, April, confirmed what everyone in Additionally, 89% of those being discouraged, we see airline 49% of respondents said it would the industry knows full well: 79% surveyed believed the pandemic leaders ready to make big, bold matter more during the business of the airline executives surveyed “will fundamentally after how and even unconventional moves recovery. said the pandemic was the most airlines do business in the next five to get back on track,” Atmosphere “However, a worrying point challenging moment in their years”. Research Group president, Henry of note is that nearly half of all careers. Conducted by Atmosphere Harteveldt, said. airlines surveyed (47%), believe More positively, 96% of airline Research Group, the study The survey detected a shift inadequate technology will keep professionals who responded predicted that in another two years, in airline attitudes about the them from fulfilling their visions of to the poll said the “crisis has airline direct and online channels importance of merchandising/ dynamically priced offerings,” the created opportunities” for the will account for 55% of bookings, a retailing to their businesses. survey authors said. ■

China and Australia biggest beneficiaries of domestic market rebound

In China’s case it is the giant climbing very rapidly to 90% or health clearances are now March compared with a year ago. sprawl of the nation that has above of pre-pandemic levels. making the trans-Tasman journey Domestic load factor averaged produced a near 100% rebound And unless there is setback between the two countries 73% to 76%. in domestic air traffic in a few in containing COVID-19 across without quarantining on arrival at CEA reported the most short months. Australia and New Zealand, it can their destinations. Tickets sales impressive numbers with Much further south and east, only get better for the Pacific Rim at carriers flying “the ditch” are a 304.7% leap in domestic airlines serving the continent of carriers. outstripping available capacity. passengers for the month Australia also are benefitting from On April 19, the region’s In China, Air China, China over March last year. Air China the nation’s geography but on a first two-way air travel bubble, Eastern Airlines (CEA) and recorded a 176% improvement in less grand scale. At press time, between Australia and New China Southern Airlines (CSA) demand over 12 months ago and Australians were storming back Zealand, came into force. recorded triple digit increases CSA was up 122.4% compared to air travel in numbers that are Citizens with the relevant in domestic passenger traffic for with the same month last year. ■

6 / ORIENT AVIATION / APRIL-MAY 2021 ADDENDUM

IATA boss warns providers against opportunistic fee hikes

By Tom Ballantyne their desire to recover the money they lost in 2020. It’s not going It has not taken new International to be possible for airlines to do Air Transport Association (IATA) that. It should not be possible for director general, Willie Walsh, suppliers in the industry to do long to demonstrate he means that,” he said. business. While continuing to Walsh added airports such lobby for relaxed border and as London Heathrow had clearly quarantine restrictions as well as demonstrated they wanted to preparing for recovery from the recover lost revenue. “We expect pandemic, he made it clear he has the regulator in the UK to be very concerns about some sectors of tough, to take a stand, particularly the industry when he said airlines where it [London Heathrow] is “will not accept monopolistic type trying to recover money spent behaviours from key elements on the third runway - that was not of the value chain if they seek to really supported by the industry. ensure this behaviour is clearly very quickly. “But we do have to recover their losses of 2020 as we It was something Heathrow not accepted and is not to be recognize it is not going to be easy get going again”. wanted to do,” he said. tolerated.” to get back to the same level. A lot Nor did he leave anyone in Also, IATA is seeing evidence But Walsh had a pat on of aircraft that were in operation doubt about who he had in mind. air traffic control suppliers have the back for one sector of in 2019 have been retired. I don’t Speaking during his first online not taken the opportunity to the industry - aircraft leasing. see those aircraft coming back press briefing since taking charge improve the efficiency of their “Generally, the leasing industry into service. I see an industry that at IATA on April 1, the former Aer operations during the crisis. “So, is competitive. There are lots of will be smaller in the short term as Lingus, British Airways and IAG we see evidence some of them options out there for most if not it gradually recovers,” he said. (International Airlines Group) are trying to recover costs. In all airlines and we continue to see “Clearly, some airlines will boss said he was looking at some effect, some of these guys just act evidence of that,” he said. take advantage of the recovery, airports and air traffic control as monopoly suppliers. There is “In many cases, lessors but in most cases where airlines providers. no alternative,” Walsh said. have been part of the solution have restructured it is because it “We need to be very careful “We will be very strong to the cash crisis airlines faced had to happen. Without it, they that others don’t try and exploit and aggressive in opposing in 2020. There has been a lot of would be out of business. Rising a weak airline industry when this. We will work with our sale and leaseback activity going fuel prices will be a challenge. So seeking to recover their losses member airlines to ensure these on. In most cases they have we will see cash burn even as the from last year. Principally, I am suppliers do not take advantage been, from personal experience, industry begins to recover.” looking at some airports and of the situation. And we will at rates I would consider to be Walsh, the first former pilot air traffic control suppliers who expect economic regulators normal or near normal. I don’t to head IATA, did not think his already have shown evidence of and governments to step in to have concerns about the leasing cockpit experience gave him any industry at this stage.” particular advantage in leading Walsh said his priorities the organization. “One of the were the same as those of his things it did for me was make predecessor, Alexandre de me more focused on decision- Juniac. Apart from its work with making. As a pilot, particularly as governments, the association a captain, you must be prepared is focused on acceptance of its to take decisions. You have to Travel Pass. “It is important the assess information quickly. You IATA Travel Pass is introduced have to manage risk and take and accepted. We need to offer decisions in a structured way,” the customer a digitized option to he said. travel,” he said. “It is something every leader “The concept of self-service needs to do. Having done that check-in, on-line or using apps, as a pilot has certainly made it has become a permanent feature easier for me to embrace difficult of the business so we need to get challenges and make decisions back to facilitating that.” quickly when needed as a CEO. Walsh believes the recovery, I would expect to do the same in when it occurs, will happen my role as director general.” ■

APRIL-MAY 2021 / ORIENT AVIATION / 7 NEWS BACKGROUNDER

Korean Air president outlines acquisition timetable for Asiana merger

Integration of the two international airlines required “dozens of projects to be carried n a frank and detailed online out simultaneously”, Woo said. briefing last month, Korean They included safe operations, Air (KAL) president, Woo KAL president reveals benefits of integration of IT and accounting Keehong, confirmed a full Asiana Airlines buyout systems, frequent flyer mileage merger of its former rival, • As a single brand, Korean Air intends to establish an effective programs and resolving global IAsiana Airlines, into the KAL fold global network at Incheon International Airport alliance issues. KAL is a SkyTeam would take two years. “There will • The connection network for cargo will be strengthened by the member. Asiana has been with be one brand, Korean Air, after integration of the fleets and networks of the two airlines with Star Alliance since 2003. the integration,” he said. the goal of building Seoul into an important global logistics hub “Therefore, we expect it to “We created a post-merger • KAL customers will have more choice of destinations and flight take approximately two years frequencies and therefore earn and use more mileage points integration plan (PMI) after to complete the integration • Increased operating profits by cancelling redundant routes and thoroughly conducting due after Asiana is incorporated as a enhancing connectivity diligence with the support • Consolidation of facilities, staff, aircraft, terminals, sales teams subsidiary of Korean Air,” Woo and cooperation of the Korea etc. will reduce costs said. Development Bank (KDB) and • Improving efficiency by operating 10% fewer aircraft, while “Since it is a network-based Asiana Airlines. providing the same capacity, and utilizing remaining aircraft for business, synergy of networks, “The PMI was submitted to new destinations and flight schedules aircraft and human resources will the KDB on March 17 and is being • MRO will operate as an internal part of the company, not as be very limited if the two airlines modified and updated.” a separate corporation, with the business for an enlarged KAL operate independently,” he said. The Korean flag carrier forecast to increase “Full integration is the best way created 20 working groups, made to maximize the acquisition and up of experts from the carrier and December last year, Woo said. be a subsidiary of KAL or of Hanjin will be the only way to retain external lawyers and auditors, to The PMI also details the Kal, as Jin Air is. We will decide on and secure employment for the review all facets of Asiana Airlines process of integrating KAL, the timeline and direction after long-term.” operations. Staff at Asiana and Asiana and LCCs, Jin air, Air Busan thoroughly reviewing details such The integration “will create 10 companies affiliated with the and Air Seoul. as required funds and restrictions a governance structure where airline were interviewed as part The trio of budget carriers under the Fair Trade Act. It is still the holding company, Hanjin of the process. The extended due will become one airline, Woo too early to disclose the location of Kal, owns subsidiary Korean Air diligence took three months to explained. “We are still considering the integrated LCC headquarters,” and Asiana will be controlled by complete from the beginning of whether the integrated LCC will he said. Korean Air”, KAL said. ■

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It was certainly exhausting, de Juniac said. With fewer IATA leader rose people, the pressure was even more intense for remaining staff. “I have to say the team has demonstrated a level of resilience to every challenge and creativity of engagement that is exceptional. I am very, very proud of IATA. The industry can in aviation’s most be proud. Compared with other industries I am confident aviation and airlines have been particularly well supported, defended and tumultuous era helped by the actions of IATA,” he said. Alexandre de Juniac took charge of the International Air The French-born airline veteran was well suited to dealing Transport Association (IATA) in late 2016 at a time when the with the crisis. With more than industry was experiencing significant growth. He stepped down three decades of experience in late March as the airline lobby’s members were fighting in both the private and public sectors, including senior positions their way through the worst crisis in aviation history. But he in the airline and aerospace has never lost confidence in the industry’s recovery, reports industries and the French associate editor and chief correspondent, Tom Ballantyne. government, he has seen several crises in the industry. He was chairman and CEO of Air France- KLM from 2013 to 2016 after hen the serving as chairman and CEO of severity of the Air France from 2011 to 2013, coronavirus positions that spanned heated pandemic and on one occasion violent was revealed reactions from union members to Wearly in 2020, International Air the group’s restructuring. Transport Association director One important lesson from general and chief executive, the crisis, de Juniac believed, Alexander de Juniac, did not is the need for the industry hesitate to act. As his members to strengthen its financial grounded a huge percentage management. “It showed, of their fleets, stood down probably, that the financial thousands of staff and watched structure of our industry is too financial losses widen, he knew weak, with too low profitability, IATA also had to change. too weak balance sheets and too “Very early, in late February high debt. We should work on and early March, we shifted being more financially sound in to crisis mode. We had a daily operating,” he said. meeting of the executive With airlines having survived committee at 7.30am. Everybody health crises such as SARS in was mobilized 24/7 to save 2003-2004 and later in the the industry. It was the survival organization had their objectives “We reduced the staff of 1800 decade the Ebola breakout, plan plus the restart plan plus. and targets changed,” he at the end of February 2020 they have been better prepared It was everything aimed first said. “Secondly, we instituted to something like 1400 by for the COVID-19 pandemic, of all at saving the industry, a cost-reduction plan almost December. de Juniac said. “We had tools. then preparing for the restart, immediately. By July we decided “We had to be very tough. But the unprecedented global pushing governments to take the cost reduction plan had to Everybody understood. We have spread of the crisis showed we the best decisions to help us,” he include a restructuring plan for tried to respect our values and were not prepared enough. We explained to Orient Aviation. the whole organization. So, 24% our employees. It was very painful need more cooperation and “Everybody in the of positions were abolished. but necessary.” collaboration amongst various

10 / ORIENT AVIATION / APRIL-MAY 2021 NEWS BACKGROUNDER

partners, including governments 82% of global air traffic - going been very strong support from this crisis is not a crisis of the and regulators,” he said. under is explained by at least two governments that has helped business model of the airlines or IATA has worked tirelessly reasons. airlines bridge the gap. There is aviation, it is a complete external with partner organizations such “The airlines have taken no miracle about that,” he said. shock”, he said. “The industry as Airports Council International appropriate measures to As for the future, he does will continue to be characterized (ACI) and the International Civil restructure and adapt their not believe the industry will by the co-existence of two types Aviation Organization (ICAO) to activities. Secondly, there has change significantly “because of airlines, the low-cost and establish globally standardized full service. These airlines will COVID-19 testing and vaccine probably be smaller, at least in rules. A result is the Travel Pass, Adopting more ambitious the short and medium term, but a mobile health verification app emissions targets on IATA’s agenda not in the long run. They will be that electronically captures a able to return to growth,” he In an interview leading up to his voluntary decision to step traveller’s vaccination history and said. down as the International Air Transport Association’s boss, COVID-19 test results to facilitate “In the short term, there will Alexandre de Juniac told the Financial Times the association’s safe cross-border travel. Several members were discussing tougher climate change targets. be smaller airlines with smaller airlines, including Singapore Being debated is a shift to net carbon emissions by 2050 networks and with fewer aircraft. Airlines and Korean Air, are compared with current industry goals, based on 2005 levels, of We will have, possibly, pretty trialling the app. carbon neutrality at 2020 and a 50% reduction in emissions from competitive airlines because The Travel Pass is one of the flying by 2050. they will have adapted to the major keys to recovery, IATA “The crisis has not diverted us from sticking to these economic picture. The point is, believes. “It will complement commitments. We have not changed anything, but we think we as airlines, we should be stronger vaccination and testing to should probably go further so we are working on that,” he told the financially to cope with or absorb newspaper in mid-March. convince governments to reopen shocks, financial shocks.” There was no guarantee carriers would agree on net zero their borders. Very early on we De Juniac is succeeded by carbon emissions, but the need for action had grown, he said. thought we had to provide them “That is a point on which everyone is working. But we still have to Willie Walsh, until recently CEO with a certification tool that do work on that,” he said. of IAG (International Airline would give them the comfort Strategies for establishing more ambitious emissions reduction Group), the parent company to reopen their borders without levels will be part of airline member discussions at the association’s of British Airways and Iberia. reimporting the virus and annual general meeting to be held this year in Boston from October For Walsh, the departing re-infecting their populations,” 3-5. IATA boss has no advice. he said. “He is a highly skilled, highly There have been casualties regarded professional and very from COVID-19. Forty to fifty experienced. I have nothing to airlines, many of them small advise him except to say IATA is a and mid-sized, have entered nice organization with very good bankruptcy and there are more people. It has demonstrated in the middle of Chapter 11 or its ability to adapt and have a under administration, bringing leading role in the industry. I the total to 60 or 70, de Juniac hope that will continue. I am sure said. That there have not been that is at the heart of Willie’s more of the group’s more than vision for this organization,” de 290 members – they represent Juniac. ■

APRIL-MAY 2021 / ORIENT AVIATION / 11 MAIN STORY

INDUSTRY MOMENTUM GATHERS FOR “VACCINE PASSPORTS” ACROSS REGION Airlines believe the Travel Pass will be a key to recovery from the coronavirus pandemic, confirming passengers have been tested and vaccinated before they fly. But which pass should be used? Or should it be a one size fits all document? Associate editor and chief correspondent, Tom Ballantyne reports.

he International Air Transport Association COVID-19 emerging as critical to the recovery of air travel, (IATA) is increasingly concerned that a several versions of the passes are being trialled across the proliferation of travel passes or “vaccination globe. passports” being trialed by both private They include IATA’s Travel Pass, which is undergoing companies and governments will add even more live trials with several airlines, including Singapore Airlines complexityT to air travel. (SIA), Korean Air and All Nippon Airways. On March 17, The airline body is lobbying hard to ensure governments IATA announced the arrival at London’s Heathrow Airport establish a global standard for the systems on offer. of an SIA flight from Singapore carrying the first travellers Little wonder. With digital documentation ensuring an using the Travel Pass app to manage their travel health airline passenger has been tested and vaccinated against credentials.

12 / ORIENT AVIATION / APRIL-MAY 2021 MAIN STORY

The flight was the second phase of SIA’s Travel Pass trial will happen and it will be good news. “Then, with this and was operated on the Singapore-London route from unique standard you can have a certain number of digital March 17-March 28. systems or digital apps that could work with that standard. The airline group said if the Travel Pass pilot was We should have a unique standard to effect the key features successful, “it would pave the way for the integration of the with which this system or app should comply.” entire digital health verification process into the Singapore To gain maximum benefit from the IATA Travel Pass, Air app from around mid-2021, using the IATA framework”. the standardization of test or vaccination certification and “The successful implementation of the IATA Travel Pass acceptance by authorities is critical. A recent IATA poll of in this trial with Singapore Airlines passengers demonstrates travelers found 89% agree with the need for global standards technology can securely, conveniently and efficiently help and 80% are keen to use a mobile app to manage their travel travelers and governments manage travel health credentials. credentials. The significance of this for the re-start of international Last month, the International Civil Aviation aviation cannot be overstated,” said IATA’s then director Organization (ICAO) endorsed the establishment of global general, Alexandre de Juniac, in late March. standards for testing/vaccination certification, bringing While working with IATA, some airlines have been travel passes closer to reality. trialing other apps. Qantas Airways and Cathay Pacific The next step is up to governments. They need to Airways have been testing CommonPass, developed by a develop a digital COVID-19 test/vaccination certificate nonprofit public trust. It is operated by The Commons when people are tested or vaccinated so there is a verifiable Project on an open, independent, sustainable, not-for-profit document on their mobile devices. “This will ensure basis. equivalence, mutual recognition and acceptance of It said countries need to trust a traveller’s record of a COVID-19 certifications for passengers when they travel COVID PCR test or a vaccination administered in another around the world,” said de Juniac. country. Countries also will need the flexibility to update For airlines there are enormous challenges in this their health screening entry requirements as knowledge of process, some of them explained by Joyce. There are a the pandemic evolves and science progresses. Airlines, number of parties involved, he said, including airlines, the airports and other travel industry stakeholders will need the application providers and governments. same. “The Commons Project, together with The World “Governments are doing their own testing on essential Economic Forum, is working to initiate the CommonPass input required from airlines. The government has an framework to address those challenges”, the non-profit immigration system in Australia and this is essentially an organization said. extension of that. When we check in somebody, the data will It is not alone. The European Commission (EU) is pass to the government. They will say if it is valid to check in proposing the introduction of a COVID passport that could a person from a visa requirement point of view. We think allow 450 million Europeans to travel freely between from a vaccination and testing point of view,” the Qantas countries from the northern summer. Digital Green Group CEO said. Certificates would be delivered to EU residents who can “The reason we are testing multiple applications is to prove they have been vaccinated. They also will be available work with our government as well. We have been doing this to individuals who have tested negative for the virus or have on repatriation flights to see if it meets their requirements proof they have recovered from it. and understand the pros and cons of each of At press time, Qantas Group CEO, Alan Joyce, warned them. We have not Australia was at risk of falling behind the rest of the world “if we don’t open international borders once vaccinated”. De Juniac said IATA had not claimed “a monopolistic” situation with its Travel Pass. The association recognizes there will be others. “If there are too many systems we are concerned it will add complexity to airline operations and, of course, complexity for passengers – which would be very bad news,’’ he said. “We are advocating a reduced number of systems for simplicity and security reasons. Otherwise, it will be difficult to convince governments and passengers that having thousands of different passport apps or whatever is a secure system that will avoid reinfection and transport of the virus when flying.” IATA believes global standards for the system

APRIL-MAY 2021 / ORIENT AVIATION / 13 MAIN STORY

Unlike some security measures still in place years after they were introduced following the 9/11 terror attacks on New York’s World Trade Centre towers, he insists any regulations and health measures must be removed once the pandemic is over. “Airlines fully acknowledge and understand the political need for governments to impose restrictions,” Walsh said in his first press conference after taking up his new role at IATA. “But it also is very important for governments to start planning for the removal of restrictions as the health crisis abates. “We want to work with governments so they can better understand what will be required from airlines. It is not come to a conclusion on that. going to be easy for airlines just to ramp up activity. It will “We did one test last week with have to be done in a structured, coordinated and safe CommonPass from Frankfurt to Darwin and that test with fashion. There is a lot of work to be done. the government is critical as well. There are lots of issues to Obstacles to “vaccine passports” continue to be raised, resolve. There’s acceptability of different vaccinations. most particularly by the World Health Organisation There’s Sinovac, the Chinese one. There’s Sputnik V, the (WHO). Earlier this month, WHO’s regional emergency Russian one. director for the western Pacific, Dr. Babatunde Olowokure, “Are they going to be acceptable to governments? How said: “We understand travel restrictions have had significant do you confirm the validity of being vaccinated? With the economic impacts on every country. Australian side that’s easy. It’s going to be with the health “At the present time, the WHO’s position is national system that’s here and that will be linked in, we are told, to authorities and travel authorities should not introduce their system. We will receive the approval to check in requirements of proof of COVID-19 vaccination for somebody or not based on the Australian side of it. international travel as a condition of departure or entry for a “But coordinating all the other countries? That is where number of reasons.” IATA could potentially play another role. I know every other WHO’s main reasons for its viewpoint is “the efficacy of airline is testing with their own government so hopefully vaccines in preventing transmissions is not yet clear and they will all come together at the right time.” secondly, the current limited global supply of COVID-19 Like many airlines, Qantas believes several governments vaccines’’. ■ are going to make vaccination a condition of entry or exit. “Iceland is the first country that has come out and said it is going to be the case there. Other countries are talking about Qatar Airways advocated it. The Brits are, the Europeans are and I think the Australian prime minister did say it is either going to be that single global vaccine passport or hotel quarantine,” Joyce said. Qatar Airways Group CEO, Akbar Al Baker, expects “We are waiting to see what governments decide about vaccine passports to be mandatory for international travel. this process, but we are looking at our own terms and Like many of his airline peers, he sees that document as conditions and saying: ‘do we have a duty of care to our critical to a recovery in travel. passengers and to our crew’? Speaking after a four-hour Qatar Airways flight to nowhere where all passengers and crew were fully vacci- “There will be exemptions. People have immune nated, Al Baker said he would like a single global system deficiencies and we would have procedures in place to help led by the International Air Transport Association and the with such risks. The vast majority of our customers say it’s a World Health Organisation. great idea. Over 90%, last time we surveyed, said they would feel a lot more comfortable travelling on an aircraft if they knew everybody was vaccinated. “To get international back up and running you must have a confidence boost. That knowledge will be the single biggest confidence boost. Apart from it being a health and safety issue and apart from it being a government issue, which it is likely to be, it is one of the main drivers to get them back flying.” At press time, IATA’s Travel Pass was being trialled by 25 airlines worldwide, but director general and CEO, Willie Walsh, who succeeded de Juniac on April 1, has made it clear his airline members want it to be temporary measure.

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16 / ORIENT AVIATION / APRIL-MAY 2021 QANTAS READIES FOR POST PANDEMIC LIFT OFF Qantas Group has managed the devastation of the COVID-19 pandemic better than most airlines. But surviving the crisis is not the sole priority of CEO Alan Joyce. Ensuring the company emerges stronger from the biggest global disaster in the industry’s history is front and centre of Qantas strategy he told associate editor and chief correspondent, Tom Ballantyne.

ow into his 14th year as CEO of Qantas Group, remember ringing the chairman - that was in January last year Alan Joyce, made it clear to Orient Aviation last - and saying this is a risk. It could be like SARS [in month he is not going anywhere anytime soon. 2003-2004]. Early on, the airline’s planning people were Last year, after the airline raised US$2.2 billion considering the impact of international borders and Australia’s in additional debt and equity to boost survival own state borders being closed,” he said. Nfunds and formulated a three-year restructure, he assured his Joyce used one of his favourite quotes, from U.S. board he would be staying the course. “One of the important president, Theodore Roosevelt, to message his network factors when we raised the equity was would I be here to see the planning staff: “the best thing you can do is the right thing, plan through,” Joyce said. the next best thing is the wrong thing and the worst thing you “I did commit to finishing the three-year plan and there are can do is nothing”. another two and a half years to go to do that,” he said. “At an early stage, we thought we would not have It is no secret the 54-year-old Irish-born Australian is international borders open until the middle of this year (2021). passionate about Qantas. “I’ve always said the last thing I want A lot of people said that was very pessimistic. It turned out to to do is leave it when it is in its biggest moment of need in its be optimistic. We had a view of what would happen on 100-year history. It is important to have stability in the domestic with re-opening. We maintained this philosophy of management. The management team is very committed. It’s hope for the best and plan for the worst while maintaining the an amazing group of individuals. There are plenty of capability to ratchet up and also pull back if it went successors. There are a number of people who could easily do backwards. The forecasting of crisis management was really, the job, but to get Qantas through this, this was the right really well done. We never picked the timeframe, but we thing to do for the next few years. For me, that is the most picked everything that did occur.” important thing.” It was, he agreed, a nightmare for his schedulers as Almost 18 months after delivering a profit of US$650 domestic Australian state borders opened and closed and million in the 12 months to June 30, 2019, Qantas finances international border restrictions increased. “We are up to are in the red to the tune of $1.5 billion. In its latest six version 199 of the internal document that goes around with all months, to December 31, 2020, losses amounted to an of the border restrictions,” he said in March. “It has changed additional $1 billion after revenue plunged by $5.3 billion. that many times. The dynamic is such we have produced a new The group’s approach is “no surrender”. “When it was first schedule every week – at least. reported this potential virus was coming out of Wuhan, I “When I did scheduling, back in my old Aer Lingus days

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and in the early days of Qantas, there were two schedules a “Some 30% of head office has had to leave the organization as well as 30% of our total staff. There were year – northern summer and northern winter. Now, these guys people I’d known for 20 years that worked in here and are doing it that fast. It’s been an amazing exercise creating a had worked for the company for 20-30 or 40 years,” Joyce schedule every week and trying options. If they don’t work, told Orient Aviation. move on. They are doing that very effectively I would say.” “We had a chat before they left and they were very At this time, the primary focus is returning domestic positive. They knew the company had no choice. But that flying to pre-pandemic levels. The lowest point for the group was heartbreaking because before this we were making was the three months to last September 30 when domestic record profits. We were talking about Project Sunrise. capacity declined to 20%. At year end, it had climbed to 40% We were expanding. We were recruiting. COVID-19 just and was 60% by the end of last month. A national government knocked the company for six. package that is subsidizing 800,000 domestic air fares has “Nobody’s fault. Not the individuals. Not the company’s fault. We ended up having to make some terrible stimulated demand. The newly negotiated air travel bubble decisions about people who had been with the company between Australia and New Zealand has helped. Demand is for a very, very long time. now above 90%. “At one stage, more than 5,500 people were placed Reactivation of parked aircraft is underway. In March, 11 with other companies. Woolworths was phenomenal. At B737s were parked. Joyce said eight of them would be flying by one time, they took close to 2,000 people. After hotel the end of the month with the remaining three planned to quarantine issues [were tightened] governments started return to service by June 30. “We have all of the domestic employing Qantas people to work with them because A330-300s flying. We are doing some freighters with them they follow safety rules very precisely. We’ve had people internationally. We are doing some flights into Asia to carry on track and tracing and in aged health care.” freight back but they are all back. The only aircraft on the ground will be 12 A380s, which are in the U.S., and the 13 A330-200s which are mainly international aircraft. They are parked around Australia,” Joyce said. Unlike many airlines, Qantas will not abandon its A380s. “We are not going to ditch them. There is an opportunity to bring them back. Initially, we think the B787s and the A330s will re-establish the network. So everywhere we flew an A380 we intend to fly 787s, for example Sydney-Dallas and Sydney-Los Angeles. We have enough 787s to keep the network going,” Joyce said. “It is half the size. Volume is going to take a while. IATA (International Air Transport Association) is saying it will take to 2024 to return to 2019 levels. Our planning assumes we start activating the aircraft (A380s) from the end of 2023, in November and December. We have every intention of bringing them back.” Qantas chose to park aircraft in the Mojave Desert because it is only a couple of hours drive from the group’s big heavy maintenance base in Los Angeles. “We have an A380 hangar there with two of the aircraft sitting in LA and 10 in the Mojave Desert. These two are ready for maintenance if we need them. The engineers are going out every day or every other day to attend to the aircraft,” Joyce said. A project on the backburner but not forgotten is Project Sunrise. “When international borders open we will be revisiting that,” Joyce said. “In March last year, we were two weeks away from ordering the aircraft. We had a deal with Airbus on the A350-1000. We had a deal with the pilots. If anything, the business case is potentially stronger because we see a lot of demand for direct flying. “At the moment, the Perth-London flight, post the end of October, is the most searched flight, the flight most people are interested in. People will want to fly direct without going through transit. “We have to build into the case a step down in business traffic for a while. People will be using Zoom and are going to

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use other ways to avoid those trips. We are balancing the stronger from the pandemic. “Qantas will come out of this. increase in demand with the drop in business demand We will have repairs to do because we have borrowed A$2.8 potential because of the technology. billion (US$2.2 billion). We have a lot of debt. Most airlines in “After every crisis there has been a drop in business the world have, but relatively we will emerge from this stronger demand. It eventually comes back. The questions are how big than most airlines around the globe,” he said. will it be and how long will it take to return?” “We are one of only eight investment grade airlines left. Freight has been an important contributor to the group’s We have the ability to continue to borrow if needed. We are in survival. It has 15 dedicated freighters operating domestically, a situation, because of the great job of the management of ours carrying cargo for organizations such as Australia Post, TNT here, that has our domestic network nearly back to normal. It and Toll. It has two 747-8 freighters on wet lease from Atlas is generating cash flows. We have said to the market our Air that operate between Australia, China and North expectation is the quarter we are going into (April-June) is America. when we will start repairing the balance sheet. “We have kept that going all the way through COVID. “That’s probably earlier than most airlines. We are no The yields on that are really good as all freighter yields are. longer generating negative cash flows and this is after having There is no belly hold space. It is why freight has been making made 8,500 people redundant and spending a billion dollars so much money,” Joyce said. on restructuring. With the restructuring and recovery Qantas has been participating in the International Freight programs we have given ourselves the best chance of a rapid Assistance Mechanism; a targeted support measure put in recovery so we can start affording new aircraft, growth like place by the Australian Government to keep global air links Project Sunrise and domestic fleet renewal.” open in response to the pandemic’s impact. It uses freighters Strategically, Joyce believed Qantas would be in a stronger and passenger aircraft (carrying freight only) to fly to places domestic position, with a market share of more than 70%, as a such as Tokyo and Hong Kong. result of rival, Virgin Australia, scaling back operations. Last “We still think there are opportunities in the freight December, the Qantas Group claimed 74% of the domestic market. There has been a huge move to on line. We believe it is aviation market, a significant increase over its pre-COVID-19 a step change. We are converting A321s to freighters. We have share of 60%. one done and the second one is coming. We have more of “We have seen a huge amount of movement of corporate them that we will do to meet demand, particularly accounts to Qantas. In the last six months, 20 corporate domestically,” Joyce said. accounts have moved across [to us]. With Tiger (Virgin’s Two other businesses continue to generate cash for the low-cost carrier) disappearing, the opportunity is there for group. The loyalty scheme has “dramatically helped us”, said Jetstar to grow in the price sensitive segment. Jetstar will have Joyce. Its results were only down 10% during the latest period, a significant cost base advantage over Virgin. Domestic will be generating $310 million in cash for the company. The at least the size we were going into COVID and that is our Fly-in-Fly-Out business – transporting workers to and from expectation coming out of this,” he said. remote operations in outback Australia – is booming. “If As for another domestic irritant, the arrival on local anything, we have more fly-in-fly-out during this period,” mainline routes of jet aircraft at regional carrier, REX Joyce said. (Regional Express), Joyce is unperturbed. “REX to us, in some As for the future, Joyce is confident international flying ways, is irrelevant. It is more of an issue for Virgin because will begin from late October and the airline will emerge they are competing in the same space,” he said.

Joyce is looking for fleet opportunities. The group’s domestic B737s, B717s and Fokker F100s will need to be replaced in the next decade or so. “It is a good time for us to do a tendering process. It’s a good cheap time. There’s a lot of aircraft available and there are not many people thinking about ordering aircraft. It is a long-term fleet renewal opportunity for us,” he said. “We have a large number of neos on order for Jetstar and the potential to expand that is one option. The potential of the MAX is another option. There also is the potential of Embraers and the A220. There is a range of aircraft. “The Embraer E195 could replace the B717 and F100s. Also there is the possibility of Boeing if it was to commit to the NMA (New Midsize Airplane). It could be a possibility in the mix as well. It is going to be a great aircraft but they (Boeing) probably have a lot of other issues they have to sort out.”

APRIL-MAY 2021 / ORIENT AVIATION / 19 COVER STORY

Qantas has equipped 50% of its A380 fleet with new seats. One of the type is a new aircraft flown directly from Dresden to park up in the U.S. It is in the Mojave Desert with new seats no-one has sat on. “We have the kits for a large number of the other aircraft. We have paid for the seats and the retrofit. We have spent a lot of money on them. They are written down to about $400 million for all 12 of them. They only have to generate cash because the depreciation will be pretty low. “We think the demand is there. They will generate cash and the demand will eventually come back to 2019 levels.”

REX has been complaining to the Australian “When we see demand come back we will activate the Competition and Consumer Commission (ACCC) about A380 and use them. They are very cash generating aircraft and Qantas launching its regional arm, QantasLink, onto its a good aircraft to reactivate. Then we have growth on top of routes. “Of course we are going to fly our aircraft on routes that. It will be Sunrise, which will happen post 2024.” where there is demand and the big increase in demand is on Qantas has a number of targets for 2024 for investors, intrastate where people are confident of travelling. This employees and stakeholders. “We think we can get our happened to be the markets we were flying QantasLink on,” domestic margin for Jetstar to over 20%, for Qantas to 18%. he said. We could get international to recover its cost of capital. “Of the 30 new routes we came on, only eight of them International is never going to be as good as domestic, but we were REX routes. They created a lot of noise about it. They are targeting above 10% for the international business,” he threatened to pull off a whole series of routes, five of them, four said. of which we don’t operate on and one of them we have been “Loyalty can get to earnings from A$500 million to flying since 2017. They’re full of hot air.” A$600 million (US$386 million to US$463 million) which is Internationally, like every airline, Qantas will be smaller, big growth from where it was before COVID. Joyce predicted. “The swing factor is the A380 capacity. We “With digitalization the opportunities offered by people have an intention to bring that back but for now we are coping using digital applications going forward is enormous. There is with it like after every crisis: September 11, SARS, the GFC a huge incentive to get there. It will allow us, and afford us, to (Global Financial Crisis). Demand takes a dive and it takes a do projects like Sunrise, replace fleet and start returning few years to recover,” he said. money to shareholders.” ■ Pandemic delays Greater Bay Airlines launch by several months

espite unavoidable delays caused by the It arrived in mid-February and was officially delivered to GBA pandemic, it remains all systems go for Hong in mid-March. But it’s OK. We have to make sure everything Kong’s newest budget carrier, Greater Bay is done correctly.” Airlines (GBA). Former Hong Kong airport GBA, founded by property tycoon and owner of authority chief executive Stanley Hui, a senior Shenzhen’s Donghai Airlines, Bill Wong, has applied to fly Dadvisor to the airline, said the first of three 737-800s, secured 104 routes: 48 to China and the remainder to Japan, India, in Europe, is in Guangzhou undergoing work to conform to South Korea, Guam and Saipan. Its initial focus will be airworthiness requirements. It is planned for a final proving China. First flights are planned from Hong Kong to Beijing flight in mid-September. and Shanghai. The application process was ongoing and there GBA’s launch had been scheduled for July, but was had been “no objections from anyone which is a good sign”, postponed because of delays in delivery of the first of the Hui said. 737-800s from Europe so the carrier is now scheduled to take The start-up is considering adding more leased aircraft to to the air in September or October. “Under COVID it has its fleet through to 2022 and 2023. “Assuming everything been extremely difficult to get people to go to Europe as the goes alright this year with the licensing and the AOC (Air result of the pandemic that has restricted people movement,” Operator Certificate), we should be looking at four to five Hui said. aircraft in coming years every year. Hopefully, five years down “The aircraft was supposed to be delivered last November. the road we will have 25 to 30 aircraft,” he said. ■

20 / ORIENT AVIATION / APRIL-MAY 2021 NEWS BACKGROUNDER

Office, Marian Lu, told Orient Aviation last month. Taiwan’s airlines having EVA Air is optimistic about passenger traffic, based a better pandemic than on the efficient handling of the pandemic by Taiwan’s government, including its easing many airline peers of travel restrictions and the development of international air travel bubbles. While 2021 started with a decline in passenger traffic, air “Taiwan has effectively cargo recorded a significant rise in demand. Positive economic contained COVID-19 and our government is seeking data indicates air freight will be the money earner for Taiwan’s opportunities to create air airlines in the months ahead. Tomasz Sniedziewski reports. travel bubbles (ATB) with other countries. The Taiwan Central Epidemic Command Center has reopened Taiwan for transfer he first day of January EVA Air carried 28,099 policy change was a reversion services on March 1, allowing 2021was not a good passengers in January, reporting to the rules of pre-January 1. passengers to connect through start to the year for an almost identical decline in its Sobering for carriers was how Taoyuan International Airport Taiwan’s airlines. It passenger traffic, at 97.6%, as quickly the restrictions could on flights continuing to their marked the beginning CAL compared with a year earlier. change to their detriment. destinations. We expect more Tof stricter border restrictions, EVA’s numbers also were 4% “The COVID-19 situation air travel in and out of our hub introduced to contain the lower than the 32,852 customers around the world is still airport soon,” EVA Airways Public outbreak of new COVID-19 it flew in December. Passenger somewhat serious. Travel Relations Division’s Larry Lai variants. revenue, although better than restrictions and border closures said in a written reply to Orient The toll of the rules soon CAL, collapsed 91.9% year-on- mean most international Aviation. became clear. By month end, year, to TW$870 million. passenger demand this year will In the final week of last China Airlines (CAL) had Luckily for the nation’s come from essential travel such as month, CAL announced its transported 33,355 passengers, airlines, Taiwan eased restrictions business and overseas students. operating results for the 2020 a 97.4% year-on-year decline, on the entry of foreign visitors to Travel for tourism remains to year to December 31. It reported and not a good omen for the flag the country and began allowing be seen,” spokesperson and consolidated operating revenue carrier in the coming Lunar Year transit via Taoyuan International vice president of China Airlines of TW$115.25 billion (US$4.04 of the Ox. Airport from March 1. In fact, the Corporate Communications billion), a consolidated operating profit of TW$2.184 billion and a consolidated net loss of TW$280 million. Cargo was the star performer. Passenger revenue was 76.93% lower than the previous year, but air freight revenue soared by 87.06% over 2019. In the final three months of 2020, CAL hit a new record for single quarter cargo revenue, aided by the injection of 777F into a fleet already operating with 18 747F. LOOKING FOR TRAVEL BUBBLES Taiwan is enthusiastic about the opportunities air travel bubbles offer to increase passenger demand. When its first ATB, between Taiwan and Palau, was

APRIL-MAY 2021 / ORIENT AVIATION / 21 NEWS BACKGROUNDER

by several forwarders from sea destination of the shipment. The to air shipments translated into price per kg for North American welcome business for both CAL air shipments was TW$270 - and EVA. TW$280, a rate rise range of 25% In 2020, Taiwan’s GDP was to 40%. Air freight rates from 2.98%, placing it in a leading Taiwan to Hong Kong, Macau, position among the world’s and China started to inflate from economies. Exports, boosted by the first weeks of the year from the global demand for laptops, a base of TW$15-25 per kg, and tablets, smartphones and nearly doubling by the end of other gadgets to support the January to TW$30-TW$40 per kg. work-from-home trend, reached Overall, January exceeded US$345.28 billion, the highest Taiwan’s expectations for the value for a single year. sector. Cargo demand recorded So far, 2021 has delivered by China Airlines - freight revenue even better news. Worldwide tonne kilometers (FTK) - rose accelerated orders for computer 43.5% for the month and cargo announced in March, share prices (AAPA) and in data from CLIVE chips put Taiwan’s economy on revenue improved 144% in travel companies soared to Data Services and TAC Index. a trajectory for its fastest growth year-on-year, to TW$7.6 billion, pre-pandemic levels, Taiwan’s “Air cargo has been resilient in seven years, the Directorate the carrier said. Central News Agency reported. and, bit-by-bit, has clawed General of Budget, Accounting EVA Air’s January’s FTKs Clearly the ATB between back the losses we saw only a and Statistics announced in grew 34% year-on-year and Taiwan and Palau, that has now few months ago. In April 2020, February. cargo revenue was higher by come to fruition, will have a tiny volumes were down 39%, but It upgraded Taiwan’s GDP 150%, at TW$1.9 billion. impact on passengers carried by are back to pre-COVID levels. forecast for the year to 4.64% The strong demand for cargo Taiwan’s airlines, especially as it Who would have thought that from a forecast 3.83%. In March, transport, together with the only allows group travel with no possible inside 10 months? It’s Chu Tzer-ming, the head of the declining passenger capacity that individual free time and cartel-like a recovery airline passenger Directorate, told parliament it limited passenger aircraft’s access fare structures. departments will be dreaming was possible Taiwan’s GDP could to belly cargo space, created It is a start. CAL is operating of”, said CLIVE Data Services reach 5% for the 12 months of conditions for the first half of the six flights a week between the managing director, Niall van de 2021. year for freight rate increases. In two island states, EVA Air two Wouw, in Air Cargo News. In the weeks leading to the this environment, the air freight flights a week and Palau’s Pacific On top of the favorable mid-February Lunar New Year prices to Europe could reach Airways eight rotations weekly. global situation, Taiwan’s holiday, higher demand for air TW$250 and exceed TW$390 to “China Airlines plans to manufacturing activity cargo allowed CAL and EVA to North America, predict analysts actively compete for business increased in February for its increase air freight rates. quoted by media agency, UDN. opportunities from seasonal, eighth consecutive month. Its On January 27, the market “China Airlines is actively themed or corporate charter seasonally adjusted Purchasing price on European air cargo monitoring cargo trends and flights. A multi-pronged Managers Index (PMI) is flights ranged from TW$190 to sources. Progressive resumption marketing strategy that offers remaining above 60%. Strong TW$200 (US$6.71-US$7.07) per or additional services on passengers a variety of different demand for semiconductors kg, translating into a 15%-25% European routes are being air travel experiences will help made in Taiwan, and the switch price increase depending on the planned. Technical stops are boost revenue. If border closures are lifted or quarantine times are shortened by the government, China Airlines will immediately adjust its passenger services to meet market demand,” its spokesperson said. CARGO IS KING Air freight has been a bright spot for Taiwanese aviation. The global recovery in the sector has been reported by the International Air Transport Association (IATA), the Association of Asia Pacific Airlines

22 / ORIENT AVIATION / APRIL-MAY 2021 NEWS BACKGROUNDER

being adjusted to increase seven days, up from three days, revenue. Freighter routes to the for pilots and five days for flight central U.S. or the east coast are attendants. being optimized or more hold “The introduction of capacity provided,” CAL’s Lu told extended quarantine in January Orient Aviation. did affect our dispatching of flight “Oceania routes are being crews and reduced capacity by assessed to determine the more than 10%”, China Airlines feasibility of regular freighter Corporate Communications services to Australia and New Office said. Zealand. In Asia, there are plans “There is a good chance to include Ningbo as a freighter the regulations will be relaxed destination. in the near future and this “China Airlines will closely should alleviate our manpower monitor market changes and EVA has 777F and is being related communications shortage. Certain measures have COVID-19 developments to take supported by all-cargo flights equipment will see China Airlines been adopted for each flight advantage of high-value charters operated with passenger optimize its freighter routes to the dispatched by China Airlines and optimize our freighter aircraft, - dubbed by some central U.S. and East Coast. based on national quarantine capacity to increase cargo volume industry professionals as “Business will be expanded regulations and crew safety. and unit contribution.” “preighters”. In recent months, by adding services to increase These included adding crew CAL and EVA are exploring cargo traveled on board all types cargo slot supply. The European for operating return flights on the cold chain logistics market for of jets in EVA’s fleet. market is showing signs of regional routes, cancellation opportunities offered by COVID- “We are maximizing revenue recovery. China Airlines is of foreign stations with 19 vaccine delivery, reports CNA. by strategically using passenger planning to add services to higher COVID-19 risk and the The airline has obtained its Center flights for cargo only services to Europe, with stopovers in Delhi assignment of additional crew to of Excellence for Independent make up for lost travel demand and Mumbai, to tap into India’s operate return flights.” Validations in Pharmaceutical and to minimize the gap. We market potential. EVA said the stricter rules Logistics (CEIV Pharma) when will increase cargo capacity even “In Asia, new freighter “changed quarantine measures it passed IATA’s certification more when we take delivery of destinations to Ningbo and for flight crews and have had a process in 2019. Only a limited three new 777 freighters from Tianjin are in the planning stages big impact on EVA’s operations. number of airlines in Asia have the final quarter of this year and to take advantage of market Because all crew members are received this accreditation so CAL the first three months of 2022,” developments.” required to follow the stricter self- hopes to dominate the market EVA’s Lai said. health management practices, in the early stages of COVID-19 The hot cargo market has STRICTER QUARANTINE it is challenging for us to adjust vaccine distribution alongside spread to Starlux Airlines, the REGIMES FOR CREW flight crew scheduling, rotation Singapore Airlines, Cathay Pacific ambitious carrier that started CREATES PROBLEMS plans and flight plan dispatches”, Group and China Southern operations almost at the same The unwelcome news of stricter the airline said. Airlines. time as the pandemic began. The quarantine rules for crew “Aircraft crew is closely EVA heralds its experience carrier is carrying about 10 to 20 came into force in Taiwan last supervised and are managed to in cold chain logistics and adds revenue passengers on board December after a pilot with ensure they comply with home its representatives had briefed each of its flights but when cargo a New Zealand passport and quarantine and self-health the government about its belly holds of its A321neo are employed by EVA broke the management guidelines. Work- transportation capacity for the fully loaded, the freight revenue island’s record of more than life balance for crew members COVID-19 vaccine. basically supports variable costs, 200 days without any local also is important to China CAL cargo capacity has been Starlux spokesman, Nie Guowei, COVID-19 infections. Despite Airlines. Crew quarantines are boosted by the arrival of new told Taiwan’s ET Today. the otherwise stellar epidemic enforced without compromising 777F. Originally, the twin jets In the CAL 2020 results safety record of the Taiwanese on aviation safety,” Lu said. were to gradually replace the statement, CAL chairman, airline industry, public opinion airline’s 747 freighters. Su-Chien Hsieh, said; was outraged not only by the FUTURE OUTLOOK But Lu told Orient Aviation “Opportunities offered by the behavior of the pilot. He took Solid demand for air freight, “China Airlines is continuing transfer of sea freight should advantage of his position as expanding manufacturing and to optimize its fleet and has continue to generate steady a captain and violated strict export sectors and commitments taken delivery of three all-new demand in the air transport company conduct by refusing to from politicians to secure global 777F. Twenty one freighters are market in the first half of the year. wear a mask on the flight from supply chains for local industry therefore available this year, “This, along with steady the U.S. to Taiwan, infecting ensure cargo will remain in the including the 18 existing 747F”, growth in the stay-at-home two of his colleagues. The new spotlight in Taiwan aviation in she said. economy, e-commerce and rules extended quarantine to 2021.

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have become a burden on airline become a new air travel trend. Taiwan’s vaccine politics operations. COVID-19 vaccines In addition to online check-in are helping the global economy and self-check-in of luggage, A recent edition of The Economist reported a trend: countries recover from the pandemic but CAL is rolling out check-in kiosks that curbed COVID-19 fast were being slow to vaccinate which vaccination rates in Asia are with facial recognition in San could mean a return to normal air travel schedules was a distance behind those in North America Francisco, Hong Kong, New York, prospect. Since the outbreak of the pandemic, Taiwan has recorded less and Europe. Asia may face a Taipei Songshan Airport and than 1,000 cases of the coronavirus, of which most were imported. slower recovery,” said EVA’s Lai. other airports around the world It has recorded 10 COVID-19 related deaths. The results have “The vaccine rollout means to provide more convenient and catapulted Taiwan into the global spotlight as one of the biggest [more] travel bubbles may soon secure services”. success stories in controlling the virus outbreak. become a reality. China Airlines Carefully watched new Ironically, the good news has meant the country is now lagging will work with the government entrant into Taiwanese skies, behind other nations in its vaccination program. It is not the result and scheduled passenger routes Starlux Airlines, is building brand of lack of effort. It is the outcome of a specific geopolitical situation. when the market allows. At identity with collaborations such Taiwan is excluded from the World Health Organization (WHO), the same time, we will comply as launches of premium brand which makes it difficult for it to acquire the vaccine, Taiwan’s with the quarantine policies and cars, flights with alcohol tastings leaders said. The first batch of vaccines has arrived in Taiwan with more regulations of each country, from a whisky producer, package planned in coming months, but to date the quota of the imported continue to practice protective tours - dubbed micro-travels – to vaccines is too small to reach the vaccination targets set by the measures aboard our aircraft, and Taiwan’s tourist spots and its own government. enforce quarantine management online shop. With negotiations continuing to acquire more vaccines on the for crew members,” CAL said. Initially envisaged as a means international market, attention has turned to the development of to connect with the friends of the local vaccines to fight the pandemic. PREPARING FOR POST- brand, the popularity of Starlux At present they are proceeding through testing, but if they clear PANDEMIC REALITY branded products has pushed clinical trials phase III, they could be mass produced from July in CAL is busy with important fleet sales on the site in some months sufficient quantities to vaccinate the entire population of Taiwan changes. Besides its new 777F, it to TW$10 million (US$354,000), and also develop an export market. The topic of vaccinations in Taiwan is being politicized. As will soon accept new A321neo to said the Airline’s spokesperson, tensions between Beijing and Taipei have become more heated, replace its narrow-body 737-800. Nie Gouowei, in a recent national Taiwan has announced Mainland- manufactured Chinese vaccines “Deliveries of the A321neo interview. cannot be trusted because there is not sufficient data about their passenger aircraft will commence At the end of January, the safety. this year as planned”, the CAL Starlux brand expanded its digital Its leadership has ruled Taiwanese vaccinated with the Chinese spokesperson said. footprint by launching a series of vaccine will not be exempted from 14-day quarantine. In the long The last day of January branded snacks and beverages run, failing to recognize vaccines from both countries is expected marked the beginning of the in the Taiwanese distribution to damage economically important cross strait traffic. phase out of Embraer’s E190 network of 7-Eleven Convenience aircraft from the fleet of CAL stores. “Cargo will continue to be prices and compete for business subsidiary, Mandarin Airlines. In In the meantime, Starlux is the operational focus of China opportunities.” March, CAL farewelled its 747 proceeding with its acquisition Airlines in the coming year. The recovery of the fleet with the “747 Queen of strategy which aims to have a fleet Congestion at European and international passenger traffic the Skies Farewell Party” flown of 39 aircraft by 2024, putting North American seaports saw depends on easing the border by CAL B-18215, which was it on par with CAL and EVA. many urgent orders switch to air restrictions, something that delivered to CAL in April 2005. Inauguration of flights to North freight, CAL told Orient Aviation. Taiwan, so far very successful Along with the fleet changes, America has been postponed until In 2021, cargo will still benefit in limiting the spread of the CAL said “zero-contact travel had the end of 2022. ■ from a shortage of holds in the coronavirus, is cautious about market. Demand for air transport implementing, at least until it [to transport] semiconductors, reaches its goal of vaccinating 5G, electric vehicles and medical 60% - or15 million citizens - with supplies continues to remain high a COVID-19 vaccine. as well. “IATA projects international “China Airlines will make travel will not recover to the most use of our 21 freighters pre-COVID levels before 2024 at along with the belly holds of the earliest. Uncertainty caused passenger aircraft to dynamically by the pandemic could lead to adjust our capacity. We will more border restrictions and also monitor market dynamics slow recovery for international in order to adjust our cargo travel demand. Rising oil prices

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Bumpy business forecast for aviation lessors

It has been a mixed picture for aircraft and engine lessors navigating the coronavirus crisis. Some have done better than others as airline customers, desperate to preserve dwindling cash reserves, rushed to negotiate pauses in rental payments. Analysts believe 2021 will be another tough year for the sector, reports associate editor and chief correspondent, Tom Ballantyne.

n the midst of the COVID-19 To BOC Aviation managing and lease back activity while crisis shareholders in major director and CEO, Robert Martin, reducing and deferring orders Longer term, lessor, Hong Kong-listed there’s nothing magic about the from manufacturers in the near it’s not all bad news. and Singapore-based BOC result. With revenue and other term. We delivered 54 aircraft to ResearchAndMarkets.com’s Aviation must be thanking income up 4% year-on-year, our airline customers, taking our latest report - “Commercial Itheir lucky stars. Almost total assets rose 19%, to $23.6 owned and managed fleet to a Aircraft Leasing - Global unbelievably the company billion. Operating cash flows, new high of 398. BOC Aviation Market Trajectory & Analytics - said the global reported a net after tax profit net of interest, increased 13% demonstrated resilience in the market for commercial of $510 million in the year to compared with 2019. “In face of a global pandemic and aircraft leasing, estimated December 31. Revenue and other 2020, the lessor’s core business we positioned the company for at $33.7 billion in 2020, is income exceeded $2 billion for continued to perform well in the long-term earnings growth. The expected to climb as high the first time in the company’s most challenging year in aviation strength of our balance sheet as $47.1 billion by 2027, history. Shareholders are set to history,” he said. and access to liquidity remain growing at 4.9% from 2020 receive a final dividend of 11.73 “We worked to support our hallmarks of our company. to 2027. Long and medium U.S. cents per share. customers by increasing purchase These place us well to deal with haul aircraft will record the challenges COVID-19 still 5.1% annual growth and presents to the world as well as reach $42.8 billion by the end of the analyzed period. the recovery we hope will gain The U.S. market is estimated momentum later this year.” at $9.9 billion and China The outlook is not so bright to grow at 4.6% annually. for many of Martin’s corporate Now the world’s second rivals. China Aircraft Leasing largest economy, China will Group Holdings (CALC), while have a market size of $8.3 remaining in the black, reported billion by 2027, the report a massive 62.7% drop in net predicted. profit, to a slim $43 million in 2020. CALC CEO, Poon Ho – because their customers are Man, said: “Recovery of the requesting, if not insisting, on aviation industry and the general reductions or deferral of lease economy as a whole is likely to be payments. gradual and uneven, with timing COVID-19 also has meant uncertain. Yet China obviously new orders for aircraft are will be leading the recovery declining: more than 500 orders momentum in this region,” he for Boeing and Airbus planes said. CALC has 128 aircraft, were canceled last year. Avolon down from 134 aircraft at year announced last month it had end 2019. deferred 34 single aisle and Many industry lessors have three twin aisle order book been taking hits - half of the commitments from 2022-2023 global fleet is owned by lessors to 2025 and beyond. The

APRIL-MAY 2021 / ORIENT AVIATION / 25 LEASING SPECIAL REPORT

Dublin-based leasing company, but lost $786 million in the same Asked about the company’s 70%-owned by China’s Bohai months last year. customers trying to renegotiate Leasing and 30% by Japan’s Orix After the deal was unveiled, lease terms, he said: “That’s part Corporation, also had deferred Kelly told investors the GE and parcel of the daily cut and or cancelled several aircraft in the transaction was the fourth thrust of the business. What’s previous 12 months. aircraft leasing business the clear to us is the vast majority The depth of the problem lessor had purchased at a of the world’s airlines are going was on display as early as last discount to book value. “Buying to make it through. They also May when the lessor said it the right assets is important, but will have greater leverage on had received requests from doing so at the right price even their balance sheets, greater customers for relief from more so,” he said. Kelly, who has government support on their payment obligations amounting spent more than two decades balance sheets, either directly or to more than 80% of its owned in the sector, oversaw AerCap’s indirectly, and their priority will and managed customer base. 2014 acquisition of ILFC from be to reduce that. Important to consider, AIG. “They will not be spending analysts have noted, is global In an interview with U.S. billions of dollars on buying leasing companies recorded company will have more than broadcaster, CNBC, Kelly airplanes from Boeing and a buoyant 2019. They took 2,000 owned and managed explained his view of the Airbus. What they will be doing advantage of bank debt and aircraft and 300 plus helicopters recovery from the pandemic. is coming to the lessors because access to bond markets to put on its books and 300 customers “It’s different in different they will be using their own additional funding in place to worldwide. geographies. They are not all the resources to pay down leverage.” weather the pandemic. “As the recovery in air travel same. If you go to the one that Whether lessors are At the same time, aircraft gathers pace, this transaction recovered the quickest, China, successfully negotiating the crisis leasing veteran, Steven Udvar- represents a unique opportunity we saw demand bounce back. or not, analysts are predicting Hazy, chairman of California- we believe will create long-term Europe recovered really quickly 2021 will not be easy. Aviation based Air Lease Corporation value for our investors,” said over the summer, but then was consultancy, IBA, in a recent (ALC) suggested the crisis would AerCap chief executive, Aengus hit by a second and a third wave analysis, said the commercial thin the ranks of aircraft lessors. Kelly. The transaction, subject to of the virus in the fall and then aircraft leasing market appears He was right. approval from shareholders and at Christmas. The U.S. market headed for considerable turmoil Late in the first quarter regulators, is planned for closing has been a steady recovery story. this year as lessors prepare of this year, General Electric in the fourth quarter of the year. That’s definitely trending the for the return of more than announced it had sold its aircraft It is a positive strategic right way,” he said. 1,000 aircraft from customers leasing business, GECAS, development for both parties. “Speaking to a number of without clear options for onward to AerCap for $30 billion, AerCap reported a profit of $1.1 airline CEOs they all feel the same placement. establishing a new industry giant. billion in 2019, but lost $299 way. I’d say Europe would be the Even before the pandemic, GECAS will be integrated into million in 2020. GECAS recorded slowest [to recover] given the slow airlines planned to return about the Irish lessor. The combined a full-year $1 billion profit in 2019 vaccine rollout but it is coming.” 1,300 aircraft, including 200

Engine flight hours decline 50% during pandemic The aircraft engine market is Engine flight hours have not be at 2019 occupancy until type represents 22% of the new showing early signs of recovery plateaued at approximately 1.4 two years later. generation narrow-body power from the worst of the COVID-19 million a month compared with “As a whole, the aircraft plants in service, but that figure crisis, but is not set to return a record 2.8 million at December engine market is well on the is expected to increase sharply to pre-pandemic levels until 2019 and to less than 600,000 path to recovery, but specific as the MAX re-enters service at the mid-2020s, aviation data in April last year. Full scope factors such as the ability of greater scale across the globe. and advisory consultancy, IBA, engine shop visits are down 70% MRO providers to build back There is a strong order recently wrote. compared with pre-pandemic capacity will significantly affect backlog for all new narrow-body In March, it forecast a positive levels and engine MRO revenue the timeframe,” IBA said. engine types (LEAP-1A, LEAP-1B forward trend for late 2021 in has halved. The dynamics of narrow-body and PW1100G) of 7,466 engines. engine utilization, focused initially If engine MROs can build aircraft engine utilization has The backlog for many new on larger domestic markets back capacity in line with been significantly shifted by the generation wide-body engine until global vaccine uptake increases in demand, shop return to service of the 737 MAX, types also remains substantial, increases. Engine MRO demand visit levels could recover to with 168 LEAP-1B power plants, in particular the GE9X (612), will continue to lag behind the pre-COVID-19 levels by 2024, powering 84 aircraft, entering GEnx-1B (624), Trent 7000 (546) trend as airlines strive to reduce IBA said. If they lag significantly service between November and the Trent XWB (1,008), the maintenance costs. behind demand, the sector will 2020 and March. This engine consultancy said.

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wide-bodies, to their lessors this return. With airline failures and in recent years, of seamless levels until 2026. The buoyancy year (2021), IBA said. It believed increasing numbers of carriers redeliveries between lessees will in the commercial aircraft leasing these carriers would probably wanting to terminate longer likely breakdown and there will be market of the last few years have extended the majority of leases early due to restructuring, an increase in disputes between was brought to an abrupt end the leases, but now that outcome aircraft returning to lessors airlines and lessors around lease by COVID. We see a significant appears extremely unlikely. without onward placement will returns and redeliveries. impact across the supply “The vast majority of those only increase,” the consultancy “As a consequence of ecosystem particularly in the aircraft will not draw follow-on said. reduced airline fleets, shop visits MRO sector,” said IBA president, leases secured at the point of “The model, established will not return to pre-COVID-19 Phil Seymour. ■ MTU rides wave of Asia-Pacific recovery

By Tom Ballantyne engine shop in Zhuhai, southern types still with the lessors.” China and a technical services Pandemic or not, MTU n retrospect, some might facility in Perth, Australia. has been expanding. Last year, suggest the decision by “We have three different MTU Maintenance Zhuhai, a German-based MRO, MTU kinds of customers,” explained joint venture between MTU Maintenance, to open Morvan. “We have our Aero Engines and China an office in the aviation traditional MRO customers Southern Airlines that provides certainty we have is there is Ileasing hub of Singapore in sending us engines for repair. comprehensive services for uncertainty. Everything we are September 2019 was poorly We need to support them when CFM56, LEAP and V2500 doing now is based on that. timed. Not so, said Luc Morvan, the engine is in repair with lease engines, completed an expansion You need creativity. You need chief representative for MTU support. Also, we have the non- that is increasing its existing flexibility. That’s a little bit the Maintenance Lease Services in MRO customers. We are doing capacity by 50%, to 450 shop trademark of MTU not only on the island nation. a lot of work at airlines who are visits per year. Teams started the MRO side but on the leasing “In our portfolio of services not necessarily customers on the moving into the company’s and trading sides and technical some of them definitely saw a maintenance side. And then we facilities in December with the services.” decline in demand,” Morvan told have the lessors. initial goal of ramping up to Overall, MTU is navigating Orient Aviation. “It is definitely “With each of these full capacity as market demand the coronavirus crisis well. The valid for the engine leasing side customer categories you have a increases post COVID-19. company recorded an 18% where fleets are being grounded. completely different challenge. In November, plans were reduction in incoming engines in That is what we have seen. At There is still strong demand. unveiled for a second Zhuhai 2020, which was above market the same time, there has been When I say strong demand, it is facility in neighboring Jinwan. expectations of -45% in shop increased demand for technical a little bit in brackets, but every It will have an initial annual visits for the global aftermarket services and troubleshooting on time we see a strong market capacity of 250 shop visits and is in commercial engines. It engines,” he said. we are still seeing requirements scheduled for opening in 2024. attributes the results to its broad “Actually, I would say we and we are still seeing support Morvan said: “We have engine portfolio of 30 engine have been extremely busy being required. For us in the a timeframe in mind [for the types. They include the newly since 2019. The only factor that Asia-Pacific, I would say it is in recovery]. We believe it should be added LEAP engines and popular changed was the nature of the places like Vietnam, India, China back for us probably on the MRO narrow-body propulsion units services we were providing. and Australia. side in the middle to the end of from the CFM56, PW1100G-JM Of course, proximity to the “We also are seeing stronger next year and probably ahead and V2500 engine families. They customer is always critical when need from the lessor side. Not of the airline recovery. MRO are forecast to be the fastest to it comes to giving them the best necessarily for engine leasing recovery will lead airline recovery recover. support.” services, but for one of the other because grounded aircraft must Last month, MTU Aero Being close to customers two services we provide within have their engines checked Engines chief program officer, in the Asia-Pacific airline the engine leasing division - asset or repaired before re-entry to Michael Schreyogg, said the market, particularly the aviation management and technical service. company had recent campaign leasing sector, was one of the services. There is definitely “In the next two or three wins of US$5.5 billion, the major reasons MTU opened its stronger demand for engine years, there will be heavy second highest result in MTU Singapore office. It also has an experts to determine the engine financial pressure. The only Maintenance history. ■

APRIL-MAY 2021 / ORIENT AVIATION / 27 TRAINING

Cockpit training adapts for post-pandemic world

Not so long ago, headlines warned airlines would suffer critical shortages of pilots and engineers in an era of booming air travel – and then came COVID-19. Thousands of highly trained aviation personnel now exist in a professional limbo of furloughs, reduced hours and in many cases, redundancy. What is the impact of the pandemic on aviation training? Associate editor and chief correspondent, Tom Ballantyne, reports.

efore the airline world “In fact, these combined was hit by the worst challenges are expected to drive crisis in its history U.S. a demand for about 27,000 new OEM, Boeing, forecast pilots as of the end of 2021 “The the commercial fundamental factors influencing Baviation industry would require pilot demand before COVID-19 an additional 804,000 pilots remain unchanged,” he said. worldwide by 2038. Demand “As the industry emerges would be the greatest in the from the pandemic, CAE will Asia-Pacific it said, where the continue to shape the future region’s airlines would need of pilot training alongside the 266,000 new cockpit crew in the global aviation community. forecast period. We will be joining forces with Flight academies around the airlines, operators, authorities world, and particularly in the and aircraft manufacturers to Asia-Pacific, were tapping into ensure the highest level of safety the huge forecast market for and security of air travel. With pilots as recently as late 2019. For an extremely sophisticated pilot training strategies, which this, we hope to arm the industry Qantas Group was setting up technical industry, it is a threat could include outsourcing and with the insights to support the its own training academies and that cannot be ignored. decentralizing , to streamline and global aviation community to others, like Singapore Airlines, Aviation training sector managing costs. “At the same understand, rethink and learn Korean Air and All Nippon leaders, however, point out no time, pilot training providers how to build and grow the Airways were expanding their one should lose sight of the must be more flexible with their supply of highly qualified pilots.” in-house training as they took long game and that recovery price offerings and recognize The extent of the downturn delivery of large numbers of will eventually come. And even airlines need to manage their in pilot training has been difficult airplanes. if training demand has fallen overheads,” he said. to assess given most of the focus Today, one analysis has away during the pandemic, the CAE Group president, Civil has been on how badly business reported just 43% of the world’s industry must train for the future. Aviation Training Solutions, is for airlines. But FlightLogger, pilots are still flying for a living. Alpha Aviation founder, Nick Leontidis, said despite the a Denmark-based company that With around 70% of the global Bhanu Choudhrie, with facilities short-term decline in active provides software to training airline fleet grounded, thousands in the Philippines and the UAE, pilots, analysis showed the facilities globally, said looking at of flight crew have been stood said in a post-COVID-19 reality, civil aviation industry will still individual academies, it knows down or retrenched and some pilot training facilities are just require more than 260,000 new for a fact some have lost as will never return to commerical as at risk as airlines. “We are pilots in the next decade. “As much as 40% to 60% of their aviation. The danger, warn likely to see a consolidation of air travel resumes progressively activities, while others have aviation insiders, is critical talent, the sector with only those with over the next several years, the hardly been affected by the whether pilots, engineers or strong cash reserves outlasting industry will experience upward pandemic. Its findings are based other specialists, will have been the pandemic,” he said. mandatory retirement and on data collected from more lost to the industry. Airlines must rethink their attrition rates,” he said. than 45,000 users in more than

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110 ab initio pilot academies its headcount from 165 to 85, worldwide. including a reduction in flight “With live data from instructors from 70 to 34. Its currently 111 variously sized pilot base in Tamworth northwest of academies across 40 countries Sydney, has been closed. worldwide, we have been Queensland’s Qantas’ following the development of pilot Academy in Toowoomba, pilot academy training activities is continuing to operate, but closely for several years – and applications from prospective with increased interest during students has fallen by 40% this last year. We see some very during the pandemic. Plans by clear tendencies we would like to Qantas Group to open a second share with the industry to throw academy in rural NSW, are on light on how the pilot training hold. industry is actually coping with Choudhrie said: “There the crisis,” wrote FlightLogger. will need to be more reliance “A very interesting statistic to on e-learning in the initial examine is the average number May, our data started to show Technologies, SkyNex Aero, Asia cadet training, and subsequent of active pilot students per pilot a gradual recovery, which has Pacific Flight Academy (GMR simulator training. The industry is academy. The average number sustained until September, group), JetServe Aviation group, equipped to make these changes of active students in academies where the average number of Red Bird Flight Training Academy but dynamism from regulators is managed with FlightLogger active students per academy & Chimes Aviation. imperative.” has been steadily growing, seems to have stabilized. Based In Australia, which is a Solving impending shortages in fact almost doubling from on these statistics, the average major centre for flight training requires a variety of solutions, 2016 to March 2020. In March, pilot academy is currently back attracting students from across and one not to be overlooked is when COVID-19 hit worldwide, at approximately 94% of the the region, it is a completely creating a clearer path for more training activities took a severe pre-pandemic activity levels.” different story. At least two women to become pilots. “Just dive, a direct effect of entire Globally, the picture is schools, Soar Aviation and China 5% of the world’s 290,000 countries being completely or extremely mixed. In India, six Southern West Australian Flying commercial pilots flying today partly closed down. In April companies have won bids to College, have called in receivers. are women. For every twenty last year, the worst month build flying schools at five Airport Others are struggling. Flight flights taken, just one of them statistically, activities declined by Authority of India (AAI) airports: Training Adelaide reported it will be piloted by a woman. If approximately 60% of the level Belagavi, Jalgaon, Kalaburagi, had let 25% of its staff go and we are to make up the future we saw before the pandemic Khajuraho and Lilabari. Fourteen only 36 of its 72 aircraft were shortfall in the sector, finding a outbreak. bids were submitted and the operating. CAE Oxford Aviation way to shift that percentage is “However, already from nine winners were Samvardhane Academy in Melbourne reduced essential,” Choudhrie said. ■

ORIENT AVIATION JUNE-JULY 2021 Asia-Pacific airline leaders outline their perspectives on the timing of the pandemic recovery and the groundbreaking digital changes the COVID-19 experience has brought to airlines. In the 2021 June-July edition of Orient Aviation, Asia-Pacific airline leaders explain their individual strategies for rebuilding their businesses in a post-pandemic world. Issues to manage include repaying multi-billion dollar loans to successful navigation and digitalized travel for airline passengers.

Publication date: June 12, 2021 Advertising inquiries: Asia-Pacific and Europe: Defne Alpay The Americas: Ray Barnes E: [email protected] E: [email protected] M: +44 7712 829 859 M: +1 434 770 4108

APRIL-MAY 2021 / ORIENT AVIATION / 29 INDUSTRY ADDENDUM FINANCE MROS OEMS TECHNOLOGY TRAINING

AIRCRAFT INTERIORS Components China to provide test, repair commercial and military aircraft. Fokker and overhaul of the relevant Liebherr Techniek specializes in green aircraft products, including the OEM warranty completions, conversions, upgrades and Global seat manufacturer period, the companies said. refurbishments for VIP and Special Mission Liebherr-Aerospace & Transportation aircraft. The Fokker group operates a RECARO reports 60% profit SAS director business and customer regional facility in Singapore. ■ fall for fiscal year services, Joel Cadaux, said: “With the continuous growing of the Airbus fleet in Germany-headquartered RECARO Aircraft China, AFI KLM E&M Components China TECHNOLOGY Seating has reported a 60% drop in earnings and Liebherr will seek further cooperation to for its fiscal year compared with the same provide better services for their respective months in 2019. customers in the country. Singapore Airlines selects The company’s CEO and a shareholder, “Our continuing ambition is to support Dr. Mark Hillier, said the company had to airlines in all their needs and be as close as Salesforce technology for reduce staff numbers by 30% at some of its possible to where they operate.” customer services facilities but had successfully negotiated a Shanghai-based AFI KLM E&M Components China was established in Singapore Airlines (SIA) has chosen 1Point, 2013 and certified by the Civil Aviation developed by Salesforce and designed to Administration of China in November of deliver seamless and integrated customer the same year. It launched its facility with experiences, to revamp its customer case MRO services for avionics components. It and knowledge management system. offers MRO and logistics for A320s, A330s The system will be installed across all of and 737s. It is expanding in Shanghai to SIA’s contact centres and customer feedback accommodate demand for 777 and 787 MRO. handling units from late this year, the airline Europe-headquartered Liebherr- announced on April 6. Aerospace manufactures flight control A strength of 1Point is that the airline’s and actuation systems, gears, gearboxes, service agents no longer need to navigate landing gear, air management systems and between multiple systems to retrieve electronics for commercial and military customer data, product and policy information aircraft and helicopters. ■ and complete transactions, the airline said. Case management and guided workflows will be integrated with SIA’s in-house artificial Dutch investor acquires intelligence and machine learning capabilities. wage deal at its Schwaebisch Hall complex two Fokker companies from 1Point is powered by Salesforce Service in Germany that will secure employment to Cloud and the Mulesoft Anypoint Platform. mid-2023. Costs, under its global efficiency Fokker/GKN Digital engineering company, Capgemini, program Touch & Go, were lowered by has won SIA’s business as systems integrator 18% and management took salary cuts and Privately held PANTA Holdings, which has for the implementation and application reduced working hours, to navigate the a long history of investing in European maintenance support of 1Point. impact of the pandemic, the company said. ■ aviation, has bought aftermarket specialist, Salesforce senior vice president and Fokker Services, and conversions and general manager ASEAN, Sujith Abraham, refurbishment arm, Fokker Techniek, from said: “If the last year has taught us anything, MRO AND COMPONENTS parent company Fokker Technologies/GKN. it’s that digital, engaging experiences with Jointly led by Roland van Dijk and customers is no longer a nice to have. It’s an Menzo van der Beek, the two companies imperative.” Liebherr and AFI KLM E&M will invest in technology innovation and SIA said 1Ponit qualified for partial partner in China engineering excellence. funding from the Civil Aviation Authority of Owned by Jaap Rosen Jacobson, Singapore (CAAS) Aviation Development Liebherr-Aerospace & Transportation, PANTA Holdings “focuses on developing Fund because it increased Singapore’s a leading supplier of several categories companies going through a strategic competitive edge. of systems for commercial aircraft, and transformation”, the private investment “CAAS is pleased to support SIA’s AFI KLM E&M have designated the global group said in a company statement. Among ongoing digital transformation,” the company’s China components arm as a its aviation and airline investments was the authority’s director aviation industry, “Dedicated Partner and Repair Centre” for sale of VLM Airlines N.V. to Air France KLM Ho Yuen Sang, said “By transforming the MRO of Liebherr’s electronic controllers on in 2008. passenger experience for SIA’s customers at A320s and A330s. Terms of the agreement, Fokker Services provides tailored Changi, it will augment our hub’s competitive signed last month, are for AFI KLM E&M maintenance solutions for regional, offering.” ■

30 / ORIENT AVIATION / APRIL-MAY 2021 ORIENT AVIATION SPECIAL REPORTS 2021 JUNE-JULY ASIA-PACIFIC CARRIERS PREPARING FOR THE NEW NORMAL OF AIRLINE OPERATIONS POST COVID-19

AUGUST-SEPTEMBER *ASIA-PACIFIC MROS FIRST TO RECOVER FROM COVID-19 PANDEMIC *CLIMATE CHANGE MITIGATION LEAPS TO TOP OF ASIA-PACIFIC AVIATION AGENDA

OCTOBER-NOVEMBER GLOBAL AND REGIONAL AIRLINE LEADERS DELIVER THEIR JUDGMENTS OF POST PANDEMIC INDUSTRY RECOVERY

DECEMBER-JANUARY *THE 2021 YEAR IN REVIEW *ORIENT AVIATION PROFILES ITS 2021 ORIENT AVIATION PERSON OF THE YEAR

ADVERTISING ENQUIRIES TO ORIENT AVIATION MEDIA GROUP SALES DIRECTORS: The Americas / Canada Europe, the Middle East & the Asia-Pacific RAY BARNES DEFNE ALPAY E-mail: [email protected] E-mail: [email protected] T: +1 (434) 770 4108 T: +44 7712 829859

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