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WINNING FORMULA Is People, Products and Connectivity Says Cathay Pacific Airways Chief Executive, Ivan Chu

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WINNING FORMULA Is People, Products and Connectivity Says Cathay Pacific Airways Chief Executive, Ivan Chu Vol. 21 No. 8 October 2014 orientaviation.com WINNING FORMULA Is people, products and connectivity says Cathay Pacific Airways chief executive, Ivan Chu Tycoon comes Go boutique or go bust Asia’s carriers challenged home to PAL at Royal Brunei by U.S. airline consolidation? SPECIALAircraft REPORT leasing an update in the Asia-Pacific: Experience,­Flexibility­ &­Speed­Matters What matters to us is finding the right answers for your business model. There­are­many­options­available­to­ acquire­new­or­mid-life­aircraft. But­you­don’t­just­need­an­airplane­… You­need­the­right­solution­to­meet unique­business­objectives. Talk to us. A­solution­built­upon­unmatched­ industry­expertise­… Talk to AWAS. Delivered­from­an­established­global­ Ascending. platform­of­scale­and­flexibility. www.awas.­com CONTENTS Volume 21, Issue 8 COVER STORY 20 WINNING PUBLISHED BY FORMULA ORIENT AVIATION MEDIA GROUP Is people, products Mailing address: GPO Box 11435 Hong Kong and connectivity Office: says Cathay Pacific Airways 17/F Hang Wai Commercial Building, 231-233 Queen’s Road East, chief executive, Ivan Chu Wanchai, Hong Kong Tel: Editorial (852) 2865 1013 Fax: Editorial (852) 2865 3966 E-mail: [email protected] Website: www.orientaviation.com Publisher & Editor-in-Chief Christine McGee E-mail: [email protected] Chief Correspondent Tom Ballantyne Tel: (612) 9638 6895 Fax: (612) 9684 2776 E-mail: [email protected] Greater China Correspondent Dominic Lalk Tel: (852) 2865 1013 Fax: (852) 2865 3966 COMMENT last year; the Capital Airports Holding Company E-mail: [email protected] 7 A new wave of LCCs for China? of China has approved the development of North Asia Correspondent a second international airport in Beijing; All Geoffrey Tudor Tel: (813) 3373 8368 NEWS Nippon Airways and Lufthansa Cargo establish a E-mail: [email protected] 8 Gulf juggernaut gains momentum with US$32 cargo joint venture following anti-trust clearance India Correspondent billion airport expansion from European Union and Japanese regulators. R. Thomas 8 New resolve at Air India 12 Tycoon comes home to PAL Tel: (852) 2865 1013 E-mail: [email protected] MAIN STORY Photographers Rob Finlayson, Colin Parker, 16 Challenges of change in China Graham Uden Design & Production Chan Ping Kwan Printing Printing Station(2008) ADMINISTRATION 8 Call for commission to investigate MAS losses General Manager 8 Mitsubishi and Embraer win over JAL Shirley Ho BUSINESS ROUND UP E-mail: [email protected] 9 Indigo cuts $US2.6 billion deal with China lessor ADVERTISING 9 AirAsia Group airlines suffer from competition NEWS BACKGROUNDERS 9 New lifeline for THAI 24 Go boutique or go bust at Royal Brunei South East Asia and Pacific Tan Kay Hui 9 Profitable Juneyao applies for IPO Tel: (65) 9790 6090 9 Gulf Air reduces losses E-mail: [email protected] SHORTTAKES The Americas / Canada 10 Chinese owned Apsara International Air set for Barnes Media Associates Ray Barnes Phnom Penh; China Airlines signs codeshare Tel: (1 434) 770 4108 with Canada’s Westjet; China Eastern Airlines Fax: (1 434) 927 5101 E-mail: [email protected] has announced first livery change in 25 years; Vietnam Airlines has again identified All Nippon Europe & the Middle East REM International Airways as a potential investor; Xiamen Air has 26 Asia’s carriers challenged by U.S. airline Stephane de Rémusat set up a Beijing branch office; AirAsia subsidiary consolidation? Tel: (33 5) 34 27 01 30 Fax: (33 5) 34 27 01 31 PT Indonesia AirAsia Extra has been cleared for 28 MAS’s resuscitation begins E-mail: [email protected] take-off; Hong Kong Airlines will launch the © All rights reserved city’s first dual currency initial public offering; SPECIAL REPORT Wilson Press HK Ltd., Philippine Airlines has said it will not take up an Asia Pacific aircraft leasing: an update Hong Kong, 2014 option for eight of the 20 A321neos it ordered 29 China aggressively expands its lessor business OCTOBER 2014 / ORIENT AVIATION / 3 Airbus Widebody Family We don’t know where you’ll be going in fi ve years’ time, but we know how you’ll get there. © AIRBUS, 2014. All rights reserved. Airbus, its logo and the product names are registered trademarks. Airbus, All rights reserved. 2014. AIRBUS, © Our numbers will convince you. From 250 to over 500 seats, Airbus produces the world’s most modern and comprehensive widebody product line. Three families offering unbeatable economics on everything from short regional routes to the world’s longest commercial fl ights. More than 100 airlines worldwide continue to benefi t from the A330’s unrivalled low operating costs. The A350 XWB set a new standard of comfort and effi ciency in its class, with 25% lower fuel consumption compared to existing aircraft. The A380 allows airlines to increase their contribution to profi t by up to 50% per fl ight. The A330, A350 and A380 offer unbeatable comfort levels, including more personal space with minimum 18-inch wide seats as standard in economy for full service long haul. Our aircraft have the unique benefi t of full technical and operational commonality. Reducing costs across the board. No wonder Airbus is a market leader in widebody passenger aircraft. A330 A350 A380. Airbus Widebody Family, our numbers will convince you. airbus.com Airbus_Orient Aviation_Oct.indd Pg1 Prodigious UK 19/09/2014 14:44 Airbus Widebody Family We don’t know where you’ll be going in fi ve years’ time, but we know how you’ll get there. © AIRBUS, 2014. All rights reserved. Airbus, its logo and the product names are registered trademarks. Airbus, All rights reserved. 2014. AIRBUS, © Our numbers will convince you. From 250 to over 500 seats, Airbus produces the world’s most modern and comprehensive widebody product line. Three families offering unbeatable economics on everything from short regional routes to the world’s longest commercial fl ights. More than 100 airlines worldwide continue to benefi t from the A330’s unrivalled low operating costs. The A350 XWB set a new standard of comfort and effi ciency in its class, with 25% lower fuel consumption compared to existing aircraft. The A380 allows airlines to increase their contribution to profi t by up to 50% per fl ight. The A330, A350 and A380 offer unbeatable comfort levels, including more personal space with minimum 18-inch wide seats as standard in economy for full service long haul. Our aircraft have the unique benefi t of full technical and operational commonality. Reducing costs across the board. No wonder Airbus is a market leader in widebody passenger aircraft. A330 A350 A380. Airbus Widebody Family, our numbers will convince you. airbus.com Airbus_Orient Aviation_Oct.indd Pg1 Prodigious UK 19/09/2014 14:44 WORLD-CLASS TRAINING. WORLDWIDE REACH. Training and Flight Simulators for Your Embraer Aircraft f you operate Embraer commercial or executive aircraft, no matter where you’re located, FlightSafety International offers Iconvenient, professional training and advanced-technology flight simulators that leverage a strong, long-standing relationship between these two world aviation leaders. FlightSafety now serves as the factory-authorized training provider for the majority of the Embraer fleet offering a full range of training at Learning Centers in Brazil, France, Holland, the United States and the United Kingdom. We have designed and manufactured more full flight simulators and other advanced training devices for Embraer aircraft than any other company. They are in service at our Learning Centers and with leading commercial airlines worldwide. We deliver. For professional training services or flight simulation equipment perfectly matched to the capabilities of your Embraer aircraft, give us a call. LEGACY 450 • LEGACY 500 • LEGACY 600 • LEGACY 650 • LINEAGE 1000 • EMB 120 • ERJ 135 • ERJ 140 • ERJ 145 • E170 • E175 • E190 • E195 “ At Embraer our customers receive the very best aircraft, products and services. That’s why we selected FlightSafety.” – Frederico Fleury Curado President and CEO, Embraer To find out about the many benefits of being a FlightSafety Customer, please call Steve Gross, Vice President, Sales, at 314.785.7815 • [email protected] • flightsafety.com A Berkshire Hathaway company FLIGHTSAFETY EMBRAER FAMILY AD - ORIENT AVIATION - JULY/AUGUST 2014 ISSUE - Bleed: 212 mm x 283 mm Trim: 202 mm x 273 mm Live: 182 mm x 253 mm PDF/X-1a VIA EMAIL COMMENT A new wave of LCCs for China? It is no surprise that China’s airlines have hit a rough the “Big Three” carriers – Air China, China Eastern patch. The once over-regulated industry was bound to Airlines and China Southern Airlines – are planning encounter challenges as it moved to the competitive LCC subsidiaries. No doubt there will be more China global stage. budget start-ups as investors hope to emulate the Although most of China’s airlines still benefit from success of regional LCCs such as AirAsia. some form of subsidy, they are now largely corporate The new LCCs will struggle to find sufficient entities, which must deal with the same problems that landing slots at Beijing, Shanghai and Guangzhou face their regional and global rivals. to launch their services, as Spring Airlines, And so to 2014, when four factors outside the the country’s biggest existing budget flyer, has industry’s control resulted in mostly losses or profit discovered. Nor will they find it is easy to operate declines for China’s carriers in the first half of this year. the low-cost carrier model in a country where The first setback was the unexpected reversal serious air traffic congestion, causing long delays, of the renminbi’s exchange rate against the U.S. is a 24/7 problem. dollar. Secondly, the Mainland’s ongoing crackdown But that is not the idea anyway.
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