Vol. 25 No. 2 March 2018 orientaviation.com DIGITALLY DRIVEN Air New Zealand CEO, Christopher Luxon, focuses the carrier on achieving digital dominance Compensation Asia-Pacific airlines Qantas to launch mounts for engine unite to fight cyber pilot training manufacturers threats academy INDUSTRYSPECIALbest INSIGHT REPORT optionsfor slot shortages ORIENT_PW_EngineWise_Ad_Final.pdf 1 2/22/18 8:28 AM C M Y CM MY CY CMY K CONTENTS Volume 25, Issue 2 COVER STORY 18 DIGITALLY PUBLISHED BY DRIVEN ORIENT AVIATION MEDIA GROUP Mailing address: Air New Zealand CEO, GPO Box 11435 Hong Kong Christopher Luxon, admits he Office: 17/F Hang Wai Commercial Building, has become “addicted” to the 231-233 Queen’s Road East, airline business as he focuses Wanchai, Hong Kong Tel: Editorial (852) 2865 1013 his carrier on achieving E-mail: [email protected] digital industry dominance 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 E-mail: [email protected] COMMENT 28 Global forecaster remains bullish on Asia-Pacific North Asia Correspondent 5 A different Singapore Airshow MRO growth Geoffrey Tudor Tel: (813) 3373 8368 E-mail: [email protected] ADDENDUM MAIN STORY 6 Good times roll on for Qantas Group 14 Compensation mounts as more engine faults India Correspondent R. Thomas 6 Qantas to train 500 pilots a year at its new emerge Tel: (852) 2865 1013 academy E-mail: [email protected] Photographers Rob Finlayson, Graham Uden, Ryan Peters Chief Designer Chan Ping Kwan Printing Printing Station(2008) ADMINISTRATION INDUSTRY ADDENDUM General Manager 7 Norwegian Air seeking Asian partner with view 26 LEAP engine veteran moves up at CFM Shirley Ho E-mail: [email protected] to marriage 26 SIA Engineering and GE Aviation form joint 7 Asia-Pacific airlines and governments unite to venture ADVERTISING fight cyber threats 26 Asiana Airlines invests in IFE connectivity Asia-Pacific, Europe & Middle East 26 Honeywell seals deals with Lion Air Group and Clive Richardson NEWS BACKGROUNDERS Eastar Tel: (44) 7501 185257 E-mail: [email protected] 9 Digital innovation takes centre stage at 27 Thales and Singapore develop Next Gen ATM Singapore Airshow solutions The Americas / Canada Barnes Media Associates 27 Smiths Detection wins Airport Authority of India Ray Barnes contract Tel: (1 434) 770 4108 Fax: (1 434) 927 5101 27 AAR spreads its wings to India with Indamer E-mail: [email protected] partnership [email protected] 27 Pratt & Whitney marks 35 years in the Asia-Pacific 28 Jet Airways signs up with lessor SMBC Follow us on Twitter @orientaviation also - keep up with the news of the week with Orient Aviation’s Week in INDUSTRY INSIGHT SPECIAL REPORT the Asia-Pacific Too many aircraft with nowhere to land © All rights reserved 13 Red tape to go promises Vietnam’s regulators 24 IATA advocates one slot system for all countries Wilson Press HK Ltd., 16 Philippine Airlines readies for New York A350 24 Differential pricing not popular with airlines Hong Kong, 2018 launch 25 Slot auctions only a short term solution MARCH 2018 / ORIENT AVIATION / 3 Now you can accept payments in virtually any form. Saying yes to alternative forms of payment means saying yes to new streams of revenue. Our payment solutions integrate easily with your current systems, helping you accept AFPs at a lower cost. And navigate the global payments market with ease. A more complete payment program starts with UATP. Learn more at UATP.com. COMMENT A different Singapore Airshow It is unusual for an international air show to conclude India’s IndiGo and Lion Air in Indonesia. without a single order from major airlines, especially Other Asia-Pacific airlines, such as Air New Zealand in a region forecast to control 42% of the commercial and the Qantas Group, are assessing next generation aviation market in the next two decades. But it aircraft that will facilitate their network expansion. Their happened last month at the 2018 Singapore Airshow. choices and consequent orders will not be decided until In 2014, airlines wrote orders for new jets worth $32 year end or in 2019. billion at the biennial show. Two years ago, they signed This year’s Singapore Airshow was significant in that up for new planes valued at $12.7 billion. it revealed the industry is a different beast from a decade The fact of the matter is that in 2018 Asia-Pacific ago. The region’s carriers, and their peers worldwide, carriers had already finalized purchases for their fleet have become far more analytical in their fleet planning. upgrades in the short to medium term. They are now Happily, the cycle of capacity shortfall, booming readying to accept a long line of new airplanes from orders and overcapacity, followed by cancellations and manufacturers. deferrals appears to be history. It would be overstating On the Mainland, China Southern Airlines, the the case to say the industry has entered a period of region’s largest carrier, has 296 jets on order, including unrestrained financial rationality, but for the first time in B787-9s and A350-900s. China Eastern has ordered 257 many years it was business written by the services and planes and Air China 172. digital sectors of OEMs that dominated the headlines in Pacesetter Singapore Airlines has 49 B787-10s and Singapore. 20 B777-9s coming its way and there are hundreds of Come Farnborough in July we will find out if narrow-bodies being readied for delivery to low-cost Singapore was simply a pause in orders as airlines assess carriers in the region, including the AirAsia Group, their needs for future network development. ■ TOM BALLANTYNE Chief Correspondent Orient Aviation Media Group The most trusted source of Asia-Pacific commercial aviation news and analysis ORIENT AVIATION ORIENT AVIATION CHINA “It has established itself as the primary source of information on industry topics in the Asia-Pacific region” MARCH 2018 / ORIENT AVIATION / 5 ADDENDUM Good times roll on for Qantas Group The Qantas Group has reported all the targets of our financial network, including hubbing Jetstar’s portfolio of a strong interim pre-tax profit framework. Debt is towards the through Singapore and Perth,” joint venture airlines in Asia of US$761.7 million for the six bottom of our target range. Every he said. was profitable, driven by months to December 31, 2017. division is returning more than “It is taking some routes its operations in Japan and Only its international arm turned its cost of capital. We generated from Emirates on the Tasman and Singapore as well as significantly in a pre-tax profit decline of a record amount of operating starting the unique Perth-London improved results at Jetstar Pacific 5.5%, to $173.3 million. cash flow and free cash flow was service, which will be the first as excess capacity in Vietnam Despite higher fuel costs, a almost three times higher than non-stop direct link between moderated. competitive domestic market and the previous first half,” he said. Australia and the UK. These Looking ahead, Joyce said international capacity overkill, Joyce said the international changes will generate material the airline is broadly positive “Qantas Domestic had a record arm has reported a good result benefits from fiscal year 2019 and about trading conditions and the result, the Jetstar Group had a given higher fuel costs and the early signs are very positive.” prospects for consumer demand. record result and Qantas Loyalty increased competitor capacity in The international operations “After several years of turning had a record result”, said Qantas the market. This is “an important of low-cost carrier, Jetstar, around this business, Qantas Group CEO, Alan Joyce, at the transition year” for Qantas generated strong earnings, helped has a lot of momentum behind it. results announcement in Sydney. International, he said, and by the favourable operating costs Consistent financial performance Qantas International held its own forecast it was setting up for a of the B787-8, although the LCC gives us the headroom to plan for in a market that is producing bright future. lost an estimated $10 million from the future. We’re vigilant about some extremely low air fares, “The airline is welcoming the disruption caused by the Bali maintaining that performance Joyce added. the Dreamliner [into its fleet] ash cloud in the closing months and we are excited about what is “We met, or exceeded, and making key changes to its of 2017. ahead,’’ he said. ■ Qantas to train 500 pilots at its new academy Separately last month, Joyce Qantas Group to a 20% intake announced the Qantas Group of qualified women in the 2018 would establish a training Future Pilot Program with the academy to train up to 500 pilots goal of females making up 40% a year at an existing airport in of cockpit crew in the next regional Australia. The Qantas decade. Group Pilot Academy, which Joyce said Qantas will will be funded by an initial partner with one of several investment of US$15.6 million, existing training providers in will open its doors to students establishing the academy and in 2019. will consult governments at “Boeing estimates the world all levels about the location of will need about 640,000 more the training facility. The Qantas pilots in the next 20 years, Group sources pilots from a mix with 40% of them required in of its kind in the southern male. “If we’re leaving out almost of new graduates from existing the Asia-Pacific.” said Qantas hemisphere.” 50% of the population in our flying schools, pilots from Group CEO, Joyce.