Going out on a High
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Vol. 22 No. 10 December 2015-January 2016 orientaviation.com GOING ORIENT AVIATION PERSON OF OUT ON THE YEAR 2015 AND LIFETIME A HIGH ACHIEVEMENT AWARD WINNER IATA CEO Tony Tyler says TONY TYLER it’s time for someone else Director General and CEO to have a go International Air Transport Association Hawaii attracts Orient Aviation’s year Cubana de Asia’s route in review: the victors and Aviacion: set to hungry LCCs the vulnerable expand AAPA Annual Assembly of Presidents Keeping in touch with Asia-Pacific aviation has become easier Don’t miss Orient Aviation’s Week in the Asia-Pacific A digest of the region’s leading aviation stories delivered digitally each Friday to industry leaders worldwide Subscribe today at www.orientaviation.com/this-week Always first with Asia-Pacific aviation news Published by the Orient Aviation Media Group Hong Kong CONTENTS Volume 22, Issue 10 COVER STORY 20 2015 Orient Aviation Person of the Year and Lifetime Achievement PUBLISHED BY award recipient ORIENT AVIATION MEDIA GROUP Mailing address: Tony Tyler GPO Box 11435 Hong Kong Director general and CEO Office: 17/F Hang Wai Commercial Building, International Air Transport Association 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 GOING Christine McGee E-mail: [email protected] OUT ON Chief Correspondent Tom Ballantyne Tel: (612) 9638 6895 Fax: (612) 9684 2776 A HIGH E-mail: [email protected] Greater China Correspondent Dominic Lalk Tel: (852) 2865 1013 COMMENT 25 Fare war fears as American Airlines returns to E-mail: [email protected] 5 IATA cautions on growth Sydney North Asia Correspondent Geoffrey Tudor NEWSMAKERS ORIENT AVIATION’S 2015 YEAR IN Tel: (813) 3373 8368 E-mail: [email protected] 6 Indonesia’s transport minister walks his talk REVIEW 12 Trending in 2015 India Correspondent R. Thomas 12 A contradictory year Tel: (852) 2865 1013 14 Don’t get carried away: 2015 profits mask long- E-mail: [email protected] term risks Photographers 15 Forever changed: safety and security’s new Rob Finlayson, Colin Parker, Graham Uden, Ryan Peters challenges post MH17 15 Asia-Pacific LCCs are bigger but not necessary Design & Production Chan Ping Kwan better 6 Emirates Airline and MAB tie up alliance deal 18 Not in my backyard: liberalization of Asian skies Printing Printing Station(2008) 6 China’s anti-corruption blitz reaches deeper in going awry? Guangzhou 19 The victors and the vulnerable in the region’s ADMINISTRATION 7 Indonesia AirAsia crash spurs pilot training airline C-Suites General Manager debate Shirley Ho 7 IATA returns to Havana, the city of its birth 70 E-mail: [email protected] ASSOCIATION OF ASIA PACIFIC years ago AIRLINES 2015 ASSEMBLY OF ADVERTISING 7 Hong Kong airport considers more slots to relieve PRESIDENTS South East Asia and Pacific chronic congestion 26 Uncertain times ahead Tan Kay Hui Tel: (65) 9790 6090 E-mail: [email protected] NEWS BACKGROUNDERS 8 Hello world! Cubana de Aviacion welcomes The Americas / Canada Barnes Media Associates IATA’s decision to set up business in Havana Ray Barnes Tel: (1 434) 770 4108 Fax: (1 434) 927 5101 E-mail: [email protected] Europe & the Middle East REM International Stephane de Rémusat Tel: (33 5) 34 27 01 30 Fax: (33 5) 34 27 01 31 28 Patchwork of profits E-mail: [email protected] 29 European Union to seek open skies with Asean? © All rights reserved 29 Indonesian carriers told to expand or lose out to Wilson Press HK Ltd., 9 Cubana CEO: Time is right for airline to expand foreign rivals Hong Kong, 2015 10 Hawaii attracts Asia’s route hungry LCCs 30 Re-engineering SIA’s Tigerair DECEMBER 2015-JANUARY 2016 / ORIENT AVIATION / 3 SA_TVA-A350_OrientAviation_DecJan_202x273mm.pdf 1 11/27/2015 10:21:46 AM FOLLOW US: @SGAirshow Singapore Official Airshow Singapore Airshow COMMENT IATA cautions on growth A year of relative calm? Yes. A year of improved profitability will be China (758 million new passengers for a total of 1.196 for most Asia-Pacific airlines? Certainly. But that is not the billion); the U.S. (523 million new passengers for a total of whole story. Yields are down. Full service carriers are dealing 1.156 billion); India (275 million new passengers for a total daily with fierce competition from budget carriers. Airlines of 378 million); Indonesia (132 million new passengers for a have not benefitted equally from lower fuel prices. total of 219 million) and Brazil (104 million new passengers In our region, several airlines are being punished by for a total of 202 million). declines in their local currencies, a serious issue for their They are still huge numbers, but the IATA revision is a balance sheets when most of their equipment and services warning. are paid in U.S. dollars. To make money, airlines have to halt yield declines and In November, the International Air Transport Association improve on the tiny margins of an industry so vital to the (IATA) released an updated global airline passenger forecast. global economy. It is hard enough to achieve these goals in a The association’s economists downgraded passenger growth benign operating environment let alone one layered with the for the next two decades from 4.1% a year to 3.8% annually. complexity of a 21st century airline. By 2034, seven billion people a year are expected to Other challenges to profits include the costs of take to the skies, double the 3.3 billion who flew with the countering terrorist and cyber security attacks and multi- world’s airlines in 2014. Before the revised forecast, 7.4 billion dollar investments in fuel efficient aircraft that will fly billion passengers were predicted to take airline journeys in further more cheaply. 2034. Lastly, in an era where social media is remaking the way IATA said the new figures reflected negative individuals live their lives, airlines must build relationships developments in the global economy that will dampen with future generations of passengers who will only demand for air transport, especially in the world’s number communicate digitally. one future domestic market – China – where annual GDP Last year, the chief executive of Cathay Pacific Airways, more than halved, to 6.9%, in the last two years. Ivan Chu, told Orient Aviation his airline was about to invest But despite the downgraded forecast, China remains the US$130 million in social media. That’s a big chunk of anyone’s fastest growing market for airline passengers in the world, expenditure. His competitors must be doing the same. IATA said. So, as in years past, running an airline in 2016 will not be The top five countries for airlines in the next two decades for the faint hearted. ■ TOM BALLANTYNE Chief Correspondent Orient Aviation Media Group The voice of Asia-Pacific aviation 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” DECEMBER 2015-JANUARY 2016 / ORIENT AVIATION / 5 BUSINESSNEWSMAKERS ROUND-UP Indonesia’s transport minister walks his talk Indonesia’s transport minister, Bali in November. The comments Ignasius Jonan, has told his were a complete contradiction of nation’s airlines he is prepared an earlier statement from another to give away air rights to minister in the 12-month old competitors, including the Middle government of president Joko East carriers, if Garuda and other Widodo. He said Garuda and its Indonesian airlines do not launch subsidiaries should concentrate more international routes. “I on developing their domestic and like competition and I think that regional networks before they through competition airlines expanded internationally. (See operate even better,” he said at Expand or be replaced by global a major industry conference in rivals, page 29). ■ Emirates and MAB tie up alliance deal Emirates boss, Sir Tim Clark, drawn up a strategic alliance that was in Kuala Lumpur as the year will result in the cancellation of drew to a close to announce his MAB services to Amsterdam new strategic alliance with MAB, and Paris and a code-share the former MAS. And how things between MAB and Emirates. have changed between the two It remains to be seen how carriers. In the pre-Christoph MAB passengers will react to Mueller days, MAS regularly the agreement. They will now accused Gulf carriers of stealing have to fly out of Kuala Lumpur the Malaysian flag carrier’s to Dubai and onto to Paris or Kangaroo Route customers. That Amsterdam on the UAE carrier was then. – a one stop, longer journey Since Mueller took charge instead of a non-stop trip. The of the new company, MAB, in new arrangements will apply September, he and Clark have from the end of January. ■ China continues anti-corruption blitz with arrest of Guangzhou airport executive Mainland China’s anti-corruption his job for “serious violations of personalities no longer enjoying the forced resignation, for investigators have notched up discipline”. their liberty include the former alleged crimes of corruption, of several high-ranking scalps at Apart from Si, Xu and Zhou, president of the Guangzhou Beijing Capital Airport general China’s airlines and airports in other powerful Mainland aviation Airport Authority, Liu Zijing; manager, Shi Boli; the director the last 12 months. All of those of the CAAC’s Operations arrested, or “disappeared”, Management Centre, Wang were charged with corruption, Liya, and the deputy general officially described on the manager of China Southern Mainland as “violations of Airlines, Liu Xian. Earlier this discipline”. Most notable of year, five senior directors at those no longer in their positions China Southern were relieved are China Southern Airlines’ of their responsibilities at the chairman, Si Xianmin, and airline.