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Being Irresistible

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Being Irresistible Vol. 23 No. 5 June 2016 orientaviation.com BEING IRRESISTIBLE Cathay Pacific Airways must be irresistible to passengers if they are to choose the airline each time they fly, says leadership triumvirate ANA parent company Ruili Airlines chairman: Jeju Air CEO buys 8.8 % of from roadside hawker sees Asia LCC Vietnam Airlines to billionaire boss model changing SPECIAL REPORT GDSs undersupported threat from new industry technology The difference is monumental. We’re beating our commitment on improved fuel burn efficiency, now exceeding 16%. Just the kind of ongoing improvement we told you to expect from our PurePower® Geared Turbofan™ engine architecture. Learn more at PurePowerEngines.com. ™ A generation ahead Connect with us 34790_PP_16%_OrientAviation.indd 1 5/17/16 8:55 AM Client: Pratt & Whitney Commercial Engines Ad Title: 16%. The Difference is Monumental Publication: Orient Aviation - June Trim: 202 x 273 mm • Bleed: 212 x 283 mm • Live: 182 x 253 mm CONTENTS Volume 23, Issue 5 COVER STORY 22 PUBLISHED BY ORIENT AVIATION MEDIA GROUP Mailing address: GPO Box 11435 Hong Kong Office: 17/F Hang Wai Commercial Building, 231-233 Queen’s Road East, Wanchai, Hong Kong Tel: Editorial (852) 2865 1013 E-mail: [email protected] Website: www.orientaviation.com Publisher & Editor-in-Chief BEING IRRESISTIBLE Christine McGee E-mail: [email protected] Cathay Pacific Airways must be irresistible to passengers Chief Correspondent if they are to choose the airline each time they fly, Tom Ballantyne says leadership triumvirate Tel: (612) 9638 6895 Fax: (612) 9684 2776 E-mail: [email protected] Greater China Correspondent COMMENT EXECUTIVE PROFILE Dominic Lalk Tel: (852) 2865 1013 7 China‘s economic slowdown a blip on Asia-Pacific 15 From vegetable hawker to chairman of a Yunnan E-mail: [email protected] airlines’ long-term radar conglomerate in only 30 years, Lecheng is North Asia Correspondent planning for Ruili Airlines to be a leader in the Geoffrey Tudor LUNCH WITH ORIENT AVIATION Asia-Pacific Tel: (813) 3373 8368 E-mail: [email protected] 8 Big trends in aviation in 2016 analysed at the second Lunch with Orient Aviation India Correspondent R. Thomas Tel: (852) 2865 1013 E-mail: [email protected] Photographers Rob Finlayson, Colin Parker, Graham Uden, Ryan Peters Chief Designer Chan Ping Kwan LOW-COST CARRIERS Printing Printing Station(2008) 30 Ground breaking technology provided the NEWS BACKGROUNDERS impetus for eight of the region’s low-cost carriers ADMINISTRATION 20 Upstart Vietjet stalks flag carrier in home market to establish the world’s largest budget carrier General Manager 21 ANA Holdings confirms US$109 million purchase alliance Shirley Ho of 8.8% of Vietnam Airlines E-mail: [email protected] 29 Asia-Pacific airlines and airports climbing the ADVERTISING global on time performance ladder Southeast Asia and the Pacific Christine McGee MAIN STORY Tel: (852) 2865 1013 E-mail: [email protected] 10 Determining the impact of China’s slowing economy on the region’s airlines The Americas / Canada Barnes Media Associates 33 Already one of South Korea’s best performing Ray Barnes airlines, Jeju Air is in search of partnerships to Tel: (1 434) 770 4108 Fax: (1 434) 927 5101 stimulate growth E-mail: [email protected] Europe & the Middle East INDUSTRY INSIGHT SPECIAL REM International REPORT Stephane de Rémusat 35 Under threat. Airline global distribution Tel: (33 5) 34 27 01 30 Fax: (33 5) 34 27 01 31 systems companies are encountering the twin E-mail: [email protected] forces of a new, airline supported global travel © All rights reserved management system and an increasingly Wilson Press HK Ltd., common view that they are dinosaurs in a world Hong Kong, 2016 of all pervasive social media interaction JUNE 2016 / ORIENT AVIATION / 3 Which aircraft best combines comfort with efficiency? It’s undoubtedly the A350 XWB. Offering 18ʺ wide seats as standard in economy, along with a 25% step change in fuel efficiency and a 25% lower seat-mile cost, it has unrivalled low operating costs. The best bit? It’s already in the air. Airbus is the answer. airbus.com © AIRBUS, 2016. All rights reserved. Airbus, its logo and the product names are registered trademarks. Airbus_OrientAviation_June.indd Pg1 Prodigious UK 27/05/2016 10:39 Which aircraft best combines comfort with efficiency? It’s undoubtedly the A350 XWB. Offering 18ʺ wide seats as standard in economy, along with a 25% step change in fuel efficiency and a 25% lower seat-mile cost, it has unrivalled low operating costs. The best bit? It’s already in the air. Airbus is the answer. airbus.com © AIRBUS, 2016. All rights reserved. Airbus, its logo and the product names are registered trademarks. Airbus_OrientAviation_June.indd Pg1 Prodigious UK 27/05/2016 10:39 ELIMINATE CREDIT CARD FEES NEW REVENUE STREAMS COMPETITIVE MARKET INTELLIGENCE SELF-FUNDING PROGRAMS CONNECT TO ALTERNATIVE FORMS OF PAYMENT THROUGH UATP COMMENT China slowdown a temporary blip for airlines? Concern about China’s slowing economy and its impact nation on the planet. And while the Mainland’s speculative on Asia-Pacific aviation is the subject of daily industry and manufacturing sectors of the economy may be in analysis. trouble, the same situation does not apply to the travel and In the region and across the globe, particularly in North tourism industries. They are more robust than ever. America and Europe, airlines have been increasing capacity In 2016, annual air traffic growth in China is into major Chinese metropolises and more recently, maintaining its double digit expansion and the nation’s launching routes to the country’s secondary cities. airlines are continuing to grow, both domestically and In the last 18 months, China, whose economy is the internationally. So a collapse in Asia-Pacific air traveller second largest in the world, has halved its official annual numbers into China seems unlikely, especially as regional GDP rate to 6.9%. passenger growth is predicted to have an average annual Even this forecast is considered by many industry expansion rate of around 5%. analysts to be optimistic. They say that a severe economic Another set of figures also should be considered downturn on the Mainland could cut back airline traffic when assessing the health of aviation in the region. India is growth in this very important market for airlines across the recording annual passenger expansion of 20% a year and region – and the world. recently overtook China in air traffic growth. Whatever the true numbers prove to be, it is becoming Further south, Indonesia is the third largest economy clear that China’s slowing economy is having an impact on in the region. Southeast Asia, when taken collectively, is Asia-Pacific airline traffic growth, although mostly in the almost as large as the Chinese market. premium cabin. It is not yet dramatic, but it is there. So while it is important for airline managements to It would be premature, however, for airline closely monitor China’s economic performance, they also managements to “over-worry” about China and the state know that one airline market, no matter how big, does not of its economy. The nay sayers aside, global monetary solely prescribe their growth. institutions and several economic think tanks do not There may be some be bumpy times ahead for airlines believe there will be a hard landing for the Mainland in the short term, but the long term issue will be who wins economy. the biggest share of the 1.76 billion Asia-Pacific passengers China’s GDP growth is still well ahead of almost every forecast to take an airline journey in 2035. ■ TOM BALLANTYNE Chief Correspondent Orient Aviation Media Group The most trusted source of Asia-Pacific commercial aviation news and analysis ORIENT AVIATION ORIENT AVIATION ORIENT AVIATION CHINA INDIA “It has established itself as the primary source of information on industry topics in the Asia-Pacific region” JUNE 2016 / ORIENT AVIATION / 7 LUNCH WITH ORIENT AVIATION Cathay Pacific Airways and Swire Pacific chairman, John Slosar, identified six airline trends when he addressed the second Lunch With Orient Aviation in Hong Kong in May. They are that aviation is a force for economic and social good; economic pressures will result in more industry consolidation; airline investment in Big Data will be critical for determining the needs and influences of passengers; propositions in the market place will multiply rather than simplify; lines are blurring between LCCs and full service carriers in their offerings to passengers and Chinese airlines will be the next big aviation story. ■ Photos: Gareth Jones Sponsored by John Slosar and Robert Martin 1 2 3 1. Mark Sutch, Simon Large 4. Angus Barclay with the HAESL team 2. James Tong, Dane Cheng 5. Bruno Le Saint, Francis Jim, Steve To 3. Algernon Yau, C K Ng 6. Robert Lamoureux, Jeff Knittel, John Bloemen 8 / ORIENT AVIATION / JUNE 2016 4 5 6 7 8 9 10 11 12 13 14 15 7. Cliff Zhang 11. Dennis Owen, Adrian Gjurasic 14. Dino Lui, Edwin Lau, Koh Yuit Fang, 8. Paul Loo, Malte Haut 12. William Lau, Alan Lam, Ethel Lin, Stephen Mok Peter Chang 9. Simon Li, Peter Hoslin 13. Justin Sharp, Peter Davis, Tim Meaney 15. Lucie Ait El Hadj, Heidi-Anna Gordon, 10. Angus Barclay, Rupert Hogg Felix Siu JUNE 2016 / ORIENT AVIATION / 9 MAIN STORY DETERMINING THE IMPACT OF THE CHINA FACTOR As China moves through a massive shift in its economic gears, opinions differ about the influence the Mainland’s root and branch fiscal restructuring will have on the region’s airline industry. Mixed in the short term, but positive in long run, predict analysts. Tom Ballatyne reports. 10 / ORIENT AVIATION / JUNE 2016 MAIN STORY fter a near disastrous start to the year and a short lived recovery in March, the Chinese economy Don’t overlook India is once again heading in the wrong direction.
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