E-NewsletterE-Newsletter Issue 1: January – June 2019 In This Issue Message from BFS Management Team..................2 Update News: Welcome Airline Customers……….9 Events & Activities……………………10 “Guangxi Beibu Gulf Airlines” Inaugural Flight BFS Visit & FAM Trip…………………12 23rd January 2019 – Bangkok Flight Service (BFS) gave a warm welcome to flight crew of Guangxi Beibu Gulf Airlines BFS : Expand the Horizon…………13 (GX) on the occasion of handling the inaugural flight at Suvarnabhumi Airport. ..Page 9 Jeju Air 10th year anniversary BFS organized A-CDM Introductory Session 10th April 2019 - Bangkok Flight Services 29th January 2019 – Bangkok Flight Services (BFS) (BFS), warmly expressed congratulations to hosted Airport Collaborative Decision Making (A-CDM) Jeju Air for 10th year anniversary of flight Introductory Session in collaboration with Aeronautical operation based in Suvarnabhumi Airport. Radio of Thailand (Aero Thai). ..Page 10 Page… 11 BFSBFS NewsletterNewsletter IssueIssue 31: Sep Jan – –DecJune 2018 2019 www.BangkokFlightServices.com l 1 E-Newsletter Message from BFS Management Team Dear Aviation Colleagues and Friends, During the first half of the year our Ground operations have continued to grow significantly, even with the cessation of service of our customer, Jet Airways, we have handled over 10% more flights in the first half of 2019 compared to 2018. Cargo volumes tell a very different story with handled volumes down over 9% in the first half of 2019 compared to 2018. Total volumes handled through both terminals in BKK are down 12.5% based on Jan-May data. Historically air cargo is a strong benchmark for the global economy as it reflects growth in high value shipments and just-in-time inventory stocking. Usually the air cargo market sees the signs of economic downturn 6-9 months before the global impact and similarly sees the recovery 6-9 months before it has a global impact. Historic data indicates Stewart Sinclair we are heading quickly for a global downturn so we expect air cargo to Managing Director remain depressed for some time. Passenger traffic tends to react much more slowly to downturns in the global economy as the effects of reductions in travel patterns are much slower. Historically business travel will start to tail off first, as companies see reductions in revenue and profitability, followed eventually by leisure travel as people become more concerned about spending their disposable income. The world’s economy has been on an upward trend, except for a minor slowdown in 2015, since the last major downturn in late 2008 and through 2009, so a slowdown has been expected after the very strong growth in 2017 and 2018. The expected slowdown has been exacerbated by the Sino-US Trade War that has impacted both China’s growth and ultimately the global economy. At BFS we have adjusted our resources to cope with both the growth of our Ground operation and the slowdown in our Cargo operations this year to ensure we remain at similar levels of productivity to previous years. We have very strong business tools to monitor our manpower and productivity on a daily basis and this has allowed us to be flexible during this time. The continued growth of our Ground business has been especially challenging given the infrastructure restraints of BKK. Designed for 45 million passengers per year, BKK is currently projected to handle 67 million passengers in 2019. Additional capacity is planned to be added with the new concourse, satellite 1, currently under construction and a new terminal in the planning stages. In the interim we will continue to plan and manage our day to day operations with our existing business tools which will be supplemented by our roll-out of telematics and our new PRM real-time planning tool, during 2019. At Cargo we have been heavily involved with the issue of how to screen dense cargo to meet the EU and TSA requirements. As all of our stakeholders are aware, the requirements for the EU and US are similar. BFSBFS NewsletterNewsletter IssueIssue 31: Sep Jan – –DecJune 2018 2019 www.BangkokFlightServices.com l 2 E-Newsletter Message from BFS Management Team Continued… In most countries there is an established Regulated Agent programme, which allows for Freight Forwarders and Shippers to become regulated by the Civil Aviation Authority of that country. In Thailand this has been established for several years but only the Cargo Terminal Operators and Integrators have been part of this programme. This means that, currently, all international shipments leaving BKK must be screened by one of the Cargo Terminal Operators or Integrators, in practice this means that all general cargo leaving BKK must be screened by either BFS or Thai Airways. A further complication is that currently the Thai Regulated Agent programme is not recognized by the EU and so both BFS and Thai Airways have separately been validated by EU validators to become Regulated Agents under the EU RA3 (Regulated Agents from a third country) programme. The EU and US requirements to screen cargo requires the screener to be able to see sufficient detail of the cargo to ensure that an Improvised Explosive Device (IED) cannot be hidden in the shipment. Where cargo shipments come packaged in such a way that the screeners cannot identify whether an IED is hidden then the shipment must be broken down to box level and re-screened using another approved screening methodology. Unfortunately some of the major exports from Thailand use electrical components that cannot be seen through and have needed to be broken down to meet EU and US requirements and this has caused some delays in processing this dense cargo at times. All major stakeholders are involved in finding the most suitable solution and as such a bi-weekly meeting has been set up between AOT, BFS, TG, CAAT and the Freight Forwarders and Shippers, involved with processing these dense commodities, to facilitate them applying to be validated as conforming to the EU RA3 and/or KC3 (Known Consignor) programme. This will allow these companies, once validated, to be able to deliver cargo to BFS and Thai Airways, through their secure supply chain, so that these shipments will not require re-screening at the cargo terminal. Once this has been achieved this should reduce any possible delays at the cargo terminals. Bob, Colin and John all have interesting topics that they discuss during this newsletter and we welcome four airlines as highly valued new customers. You will see from the various events and happenings that it has been another busy half year at BFS and for this we thank all of our valued customers for the opportunity to serve you and also to thank you for your continued support and friendship. Stewart Sinclair Managing Director BFSBFS NewsletterNewsletter IssueIssue 31: Sep Jan – –DecJune 2018 2019 www.BangkokFlightServices.com l 3 E-Newsletter Message from BFS Management Team Dear Friends and Colleagues, It’s been another exciting past 6 months for Thailand in general and BFS as well. We were taken by such an exceptional event as the Coronation of Our New King. This was followed by the long-awaited Government elections and the follow up to those elections. On the business front, we see a very strong Baht but a first indication that the winds may be shifting in the economy with a noticeable downturn in the cargo business; which in the past has indicated a downturn in the overall economy. Albeit the downturn in the cargo business, new business opportunities for BFS have flourished in the past few months. Robert Ruesz We have been delighted by the continuous growth of our Customer General Manager Airline business with the introduction of 4 new airlines that held their Sales and Ground Services inaugural flights to Bangkok in the past few months. They are, “Guangxi Beibu Gulf Airlines”, “Hong Kong Express”, “Cambodia Airways” and most recently, “Lucky Air” and a big warm welcome to our new Airlines. They say “Time flies” and I would like to confirm that. In June, we celebrated the 10th anniversary of Jeju Airlines operating to Bangkok. I really could not believe that it has been 10 years already. Hence if 10 years ago feels like yesterday, then the next 5 years are just around the corner. Today is therefore the time to evaluate and forecast how the business environment will evolve in the next 5 years, so we may create a clear path towards our business objectives. To give us a perspective on the next 5 years, BFS invited Cpt. Puttipong Prasartthongosoth, CEO of Bangkok Airways, to share his 5 years vision with us. My takeaway from this is that BFS must remain Customer centric, but also must continue to recognize and invest in existing and future technologies, with the aim to improve services and remain cost competitive, offering value for money to our customer airlines. The speed at which technology is advancing was confirmed to us through an insightful presentation “Transformation” from the AIS CEO, Khun Somchai Lertsutiwong. I really appreciate the opportunity to hear and learn how other companies operate their businesses, discover their visions, and understand some of their challenges and opportunities. Whatever the business, we are all similar, with a vision, an objective, people, products and services to manage and deliver, with the aim to make a profit to further stimulate our shareholders to believe in us. For now, we are going to focus on the next 6 months, as we will roll into peak season again very shortly. One key focus area for us is that PRM (Passengers with Reduced Mobility) have increased every month year to year. It has become a real challenge to manage these requirements and provide the expected level of service due to so many short advance notice requests and variable daily requirements.