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PETER BELLEW GROUP MANAGING DIRECTOR and CEO, MALAYSIA AIRLINES BERHAD

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PETER BELLEW GROUP MANAGING DIRECTOR and CEO, MALAYSIA AIRLINES BERHAD Vol. 23 No. 10 December 2016-January 2017 orientaviation.com SAVOURING THE PROFIT ‘SWEET SPOT’ But no let up on costs campaign says Qantas Airways CEO, Alan Joyce ORIENT AVIATION PERSON OF THE YEAR 2016 ALAN JOYCE CEO and Managing Director Qantas Airways YEARAviation IN REVIEWand featsfaces DOUBLE ISSUEin 2016 The closer we look at your engine, the better you see it. Pratt & Whitney keeps a close eye on every engine we build and service. Then we share our decades of engine intelligence and advances in big data to bring unprecedented performance, predictability and service life to your engine. It’s the operational advantage you’ll see only from your engine maker. Take a closer look at www.pw.utc.com. Connect with us 42547_P&W_Closer_OrientAviation.indd 1 12/6/16 9:40 AM Client: Pratt & Whitney Commercial Engines Services Ad Title: The closer we look Publication: Orient Aviation - Trim: 202 x 273 mm • Bleed: 212 x 283 mm • Live: 182 x 253 mm CONTENTS Volume 23, Issue 10 COVER STORY 20 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 Christine McGee E-mail: [email protected] Chief Correspondent Orient Aviation 2016 Tom Ballantyne Tel: (612) 9638 6895 Person of the Year SAVOURING Fax: (612) 9684 2776 E-mail: [email protected] ALAN JOYCE THE PROFIT Greater China Correspondent Qantas Airways CEO and Dominic Lalk Managing Director “SWEET SPOT” Tel: (852) 2865 1013 E-mail: [email protected] North Asia Correspondent Geoffrey Tudor COMMENT 11 Low-cost carrier sales made easier with new Tel: (813) 3373 8368 5 Into the unknown distribution technology E-mail: [email protected] 12 Right place, right time for United Airlines’ Walter India Correspondent AVIATION FEATS AND FACES OF Dias R. Thomas Tel: (852) 2865 1013 2016 13 Philippines Airlines continues resurgence under E-mail: [email protected] 6 The way we were in 2016 Bautista Photographers 18 Unbridled Ambition: HNA Group controlled Rob Finlayson, Colin Parker, Hong Kong Airlines goes to the market for six Graham Uden, Ryan Peters more A350s to meet regional growth goals Chief Designer Chan Ping Kwan MAIN STORY Printing 14 More volatility ahead for the region’s airlines: Printing Station(2008) Association of Asia-Pacific Airlines annual ADMINISTRATION Assembly of Presidents forecast General Manager Shirley Ho E-mail: [email protected] 7 Achievement of the year: ICAO global ADVERTISING environment pact Asia-Pacific, Europe & Middle East 7 People of the year in 2016 Clive Richardson 8 Region of the year: China and Singapore focus Tel: (971) 50 554 6608 for foreign aerospace investment E-mail: [email protected] 9 Trending for the year: New alliances connect The Americas / Canada passengers across LCC brands ADDENDUM Barnes Media Associates Ray Barnes 9 Orient Aviation’s chief correspondent, Tom 25 A350-1000 completes maiden flight Tel: (1 434) 770 4108 Ballantyne, collects Australasian technical story 25 Airbus Group trims head count and completes Fax: (1 434) 927 5101 of the year award corporate structuring E-mail: [email protected] 26 Asia-Pacific’s top ten megahub connected NEWS BACKGROUNDERS airports Follow us on Twitter @orientaviation 10 Malaysia Airlines’ pace quickens as carrier 26 HNA Group airlines receive first A320s from © All rights reserved outlines A380 pilgrimage subsidiary Chinese lessor Wilson Press HK Ltd., 11 Moving fast at Malaysia Airlines- considering 26 Kingfisher Airlines must be wound up says High Hong Kong, 2016 B787s or A330s Court in Bangalore DECEMBER 2016-JANUARY 2017 / ORIENT AVIATION / 3 Lunch with DON’T MISS Orient Aviation Tuesday, January 17, 2017, Hong Kong GUEST OF HONOR AND KEYNOTE SPEAKER PETER BELLEW GROUP MANAGING DIRECTOR and CEO, MALAYSIA AIRLINES BERHAD THE CHINA CLUB Early bird bookings: HK$495 14/F, The Old Bank of China Building, Tables of ten: HK$4,950 Bank Street, Central, Enquiries: Hong Kong E: [email protected] Time: 12:00 - 14:00 T: +852 2865 1013 Lunch with Orient Aviation is an occasional luncheon series presented by the Orient Aviation Media Group, a print and digital news platform that reports on the leaders and issues shaping Asia-Pacific and Middle East commercial aviation. Sponsored by COMMENT Into the unknown As another year draws to a close, Asia-Pacific airlines regional vice president Asia-Pacific, Conrad Clifford, can look back on a relatively stable 12 months. Fuel pointed out in an Assembly panel discussion that this prices have remained moderate. Passenger traffic year 60% of airline profits will be made in the U.S. continues to grow. There were no major crises in the In this region, over-capacity is a particular region. Profitability is as good as it has been for years. problem, especially at low-cost carriers. The election But when airline leaders met in Manila for the of Donald Trump as U.S. president elect and the 60th Assembly of Presidents of the Association of vote for Brexit have added to industry volatility. Asia Pacific Airlines last month, there was caution in Both Europe and North America are very important the air when discussions turned to the year ahead. markets for Asia-Pacific carriers. Apart from the perennial issues of worsening air “It’s very difficult to call the direction of the traffic congestion and over-capacity, the CEOs were market. We’ve had seven years of pretty solid growth. most worried that competition and low oil prices were That’s been good, but no one really knows where it’s having an adverse impact on income. going from here,” Clifford said. Combined, the two factors have forced down In the view of Orient Aviation’s 2016 Person fares to unprecedented levels, with the result that of the Year, Qantas Airways CEO, Alan Joyce, new airlines are carrying more passengers but are making technology will be critical in sustaining a profitable less money. airline. As he nears the completion of the Qantas The region’s carriers are about to report a Group’s three year turnaround, he said operational combined $6.63 billion profit for 2016, which is their and managerial transformation has to become the best result in years. The question is can this profit run built-in core of the business and not just a one-off be sustained in 2017? exercise. No one would disagree, but that does not International Air Transport Association’s (IATA) mean it will be easy. ■ 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” DECEMBER 2016-JANUARY 2017 / ORIENT AVIATION / 5 YEAR IN REVIEW The way we were in 2016 Change of pace Outstanding performance An orderly transition Loves business Tony Tyler steps down CEO Christopher Luxon Boeing vice chairman and Ruili Airlines chairman, after his success at IATA and all “Air New Zealanders” Airplane unit boss, Ray Conner Dong LeCheng t’s been another year of between airlines of both models of both full service carriers lower yields had an impact that challenges for the region’s countries. Chinese airlines have and budget airlines are being varied across the region. The airlines with mixed financial inundated Australia with flights challenged. Airbus introduced its prevailing view was there were results, intensifying since the previous Sino-Australian latest A350 model, the -1000, in too many budget carriers for too competition, unresolved Open Skies agreement was signed Toulouse in November and said few slots and that consolidation Iairport and air traffic congestion in January 2015. It is estimated it is committed to delivering the will come in the LCC sector when and plenty of global uncertainty. that 200 million Mainland tourists aircraft to its launch customer, oil prices rise. It also has been a landmark will travel overseas by 2020. testy Qatar Airways, on time in Oil prices were rising at press 12 months when a long held The impact of Big Data, 2017. time, with mixed blessings for industry goal of winning support cyber security threats and rapid Earlier in the year, Boeing said airlines. Those who have hedged for a global scheme for reducing technological change were at its B787-10 is ahead of schedule, high will be very relieved. Those emissions from aviation was the top of the 2016 risks list for delivery news expected to be who have not, particularly airlines achieved. airlines. In his landmark Lunch enhanced by the streamlining that are suffering from currency But there also was disquieting with Orient Aviation address of Boeing’s business that was depreciation, won’t have the best news. With Donald Trump in May, the chairman of Cathay announced last month. Christmas. as the president-elect of the Pacific Airlines, John Slosar, The news was not so good Whatever the price of oil, the United States, the Trans-Pacific said airlines who are ignoring the at MRJ. The 70-90 seat aircraft, burgeoning of Chinese lessors in Partnership (TPP), signed last importance of Big Data may not which is Japan’s first domestically global aircraft leasing continues. February by 12 Pacific Rim be in business in five years. produced jet, announced its fifth Chasing the money, China’s HNA nations excluding China, has In Technology’s Threats delivery delay, to mid 2018, in Group devoured Avolon and been killed off. An Open Skies in April in Orient Aviation, it was October.
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