WILL SLEEPY MACAU AWAKE? Macau Ends Aviation Monopolies and Plans Larger Role in Southern China’S Greater Bay Area

Vol. 26 No. 6 July-August 2019 orientaviation.com

ZHAOQING

GUANGZHOU

HUIZHOU

FOSHAN DONGGUAN

SHENZHEN

ZHONGSHAN

HONG KONG

JIANGMEN

ZHUHAI MACAU

WILL SLEEPY MACAU AWAKE? Macau ends aviation monopolies and plans larger role in southern China’s Greater Bay Area

Industry tech leaders Asia-Pacific LCCs The Russian invasion: work to advance third force at seeking Asia’s sustainable aviation Paris Air Show seafood and sun

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COVER STORY

GUANGZHOU ZHAOQING

HUIZHOU ORIENT AVIATION MEDIA GROUP

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ZHUHAI MACAU Publisher & Editor-in-Chief Christine McGee E-mail: [email protected] WILL SLEEPY Associate Editor & Chief Correspondent MACAU AWAKE? Tom Ballantyne Tel: (612) 9638 6895 Macau ends aviation monopolies as it plans for Fax: (612) 9684 2776 E-mail: [email protected] a larger role in China’s Greater Bay Area strategy

Asia Editor Will Horton Tel: (852) 2865 1013 E-mail: [email protected] COMMENT 21 Rush to fill route gap after Jet Airways grounding

North Asia Correspondent 5 Getting the message out Geoffrey Tudor ORIENT AVIATION INSIGHT REPORT Tel: (813) 3373 8368 ADDENDUM The future of online travel bookings E-mail: [email protected] 6 Russians embrace Asia’s sun and seafood 19 Advances in mobile technology and the Internet Photographers 7 Leading industry CTOs commit to sustainable of Things have shaken up the traditional business Rob Finlayson, Graham Uden, aviation goals model of booking travel but GDSs are fighting Ryan Peters 7 Emerging Nansha Leasing funds first China back Chief Designer Southern A350-900 Chan Ping Kwan

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General Manager Shirley Ho E-mail: [email protected] NEWS BACKGROUNDERS INDUSTRY ADDENDUM ADVERTISING 8 Asia-Pacific LCCs third force at Paris Air Show 22 Honeywell Forge is latest entrant in fast-growing market for analytics software Asia-Pacific, Europe & Middle East Christine McGee 22 Lanza to supply All Nippon Airways with Tel: (852) 2865 1013 sustainable aviation fuel from 2021 E-mail: [email protected] 22 ST Engineering trials MRO drones on Air New The Americas / Canada Zealand aircraft Barnes Media Associates Ray Barnes Tel: (1 434) 770 4108 Fax: (1 434) 927 5101 E-mail: [email protected] [email protected] 10 Flying into the sun – Qantas closer to decision on historic non-stop Sydney-London flights Follow us on Twitter @orientaviation 11 Airlines “go beyond” to identify IT talent 17 United Airlines re-aligns trans-Pacific network to © All rights reserved benefit from U.S. domestic passenger feed Wilson Press HK Ltd., 18 Biometrics to eliminate document duplication at 22 AFI KLM E&M and Airbus explore virtual engine Hong Kong, 2019 congested airports? MRO

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Getting the message out

Aircraft and engine manufacturers have invested At the Annual General Meeting of the International Air billions in research and development of new generation Transport Association in Seoul in June, director general products. Airlines are spending tens of billions buying and CEO, Alexandre de Juniac, pointed out public concern these aircraft because they fly more efficiently. As about environment issues had spiked worldwide. One a result, there is a dramatic reduction in fuel and example was Europe, where Sweden is the birthplace of maintenance which in turn has brought about a massive “flight shaming” of those who travel by air. drop in CO2 emissions. “Unchallenged, this sentiment will grow and spread,” The industry takes its environmental responsibilities he said, and added that along with reducing emissions, very seriously. Its acceptance and support for CORSIA the industry must collectively tell its story more (Carbon Offsetting and Reduction Scheme for effectively. He is, of course, right. Airline chief executives International Aviation) is proof of that. at the AGM asked why the general public does not know From the beginning of this year all airlines have been more about the enlightened approach the industry has to recording their emissions in preparation for the official mitigating climate change. introduction of CORSIA next year. Aviation is the only Airlines could start with their passengers, a captive global industry to agree to a global market-based measure audience. More than 4 billion passengers took an airplane to counter climate change damage. journey last year and 4.9 billion passengers are forecast It is forecast CORSIA will mitigate around 2.5 billion to take to the air in 2019. The industry could tell the good tonnes of CO2 between 2021 and 2035, an annual story of aviation’s pro-active strategy for cutting CO2 average of 164 million tonnes. Yet, despite years of effort, emissions via seat back literature or screened videos there is little recognition of this important progress. aboard commercial flights. In general, the public still seems to believe aviation It is an idea that should be adopted immediately by is a polluter and that the industry is doing nothing to airlines around the world. No one is pretending global be otherwise. There have even been calls in Europe for warming is a myth. But carriers must get out their story governments to ban short haul flights and for people to that they are serious about reducing emissions to prevent opt for land transport. irreparable damage to their businesses. ■

TOM BALLANTYNE Associate editor and chief correspondent Orient Aviation Media Group

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Russians seek Asia’s seafood and sun

Its a Russian invasion. Latest Irkutsk City with Cam Ranh, an statistics from global travel hour south of its much busier analysis firm, ForwardKeys, reveal sister, Nha Trang. Vladivostok Air growth in Russian leisure travellers has commenced daily flights from to the Asia-Pacific skyrocketed by Vladivostok and Khabarovsk also 62.8% for the 12 months to May to Cam Ranh. this year. Russian business travel Guangzhou-headquartered to the region also rose, by 27.5%. China Southern Airlines (CSA) The huge spike in Russian has increased frequencies from visitors is the result of a doubling Urumqi to Russian cities. To better in direct flights from Russia serve demand during the peak to Asian tourist destinations, Russian carriers. of US$1,600 per stay in Vietnam travel season, CSA has resumed particularly Vietnam and Thailand, Vietnam has emerged as a compared with an overall average its Urumqi-Saint Petersburg with overall seat capacity favorite destination for Russians for foreign visitors of $900, the direct route with a four times a increasing by 38%. and is expected to soon surpass Vietnam National Administration week service and has increased Vietnam is experiencing the Thailand, a nation long favored by of Tourism reports. direct flights, also to four a week, biggest rise in Russian airline Russian holidaymakers as their New direct air services from between Urumqi and Moscow. seat capacity, at 153%, followed number one destination. Last year, multiple secondary and tertiary Total international arrivals by Thailand and the Maldives, Vietnam received a record high of cities in Russia to Vietnam’s in the Asia-Pacific rose 3.8%, which saw growth of 125% and 606,000 Russian tourists, which popular beach towns underpin the from May 2018 to April this year. 58%, respectively. South Korea was 4% of foreign tourist arrivals northern European tourism boom. Russia’s 54.5% increase meant and India reported seat capacity in the country. In 2018, Russia’s S7 Airlines Europe was the top growing origin expansion of more than 30% from Russians spend an average launched direct flights connecting continent, up 6.3%. ■

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China Southern Airlines chooses Nansha leasing for its first A350-900

China Southern Airlines’ (CSA) acceptance of its first A350-900 XWB had significance for China’s lessor industry as Guangzhou Nansha Nanhang Tiandong Leasing Company, based in Guangzhou Nansha free-trade zone (FTZ), leased the aircraft to the airline. Aircraft lessors and FTZs have grown rapidly in China as a result of favourable government regulation and investor appetite for stable returns. The largest FTZ is Tianjin Dongjiang, where more than 1,500 aircraft are on lease, NYU Shanghai adjunct professor and an aircraft some are in aviation, including international lease with an A321 the different FTZs each region appraiser, David Yu, told Orient SkyCo and CSA’s leasing arm. Air to Cambodia’s Lanmei Airlines, wants to differentiate itself Aviation. Lease Corp used Hong Kong and which has Chinese ownership. with its competitive edge,” Yu Nansha received its 100th Nansha to deliver a 787-9 to CSA More aircraft destined for said. Although small, Nansha is aircraft at the end of 2018. The earlier this year in the industry’s CSA are expected to go through favourably placed as Guangzhou zone covers all industry sectors. first Hong Kong-Guangdong Nansha as partners seek local is home to CSA, Asia’s largest Official figures record it has more dual special purpose vehicle. In cooperation. “While there is airline, and is within the Greater than 2,100 lessors, but only 2017, Nansha concluded its first some competitiveness between Bay Area economic zone. ■

Leading industry CTOs commit to sustainable aviation goals

The chief technical officers (CTO) commitment to establish a sound the International Civil Aviation “As industry CTOs we of seven of the world’s leading regulatory foundation to address Organisation (ICAO) to facilitate are committed to driving the aerospace companies committed the novel issues associated with unified regulation with established sustainability of aviation.” last month to reach the emissions emerging aviation technologies regulatory bodies to establish The CTOs said the strategy to reduction goals of the aviation and to provide the necessary global standards. These include the cut emissions to 50% of the levels industry. economic support for widespread Federal Aviation Administration, the of 2005 involved three pillars: In a joint statement released Sustainable Aviation Fuels (SAF) European Aviation Safety Agency, * Continuing to develop during the Paris Air Show, the commercialization. the Civil Aviation Administration aircraft and engine designs and CTOs said: “There must be “We envisage broader, deeper of China, Transport Canada, the associated technology to improve additional public and private and ongoing co-ordination through ANAC of Brazil and others. fuel efficiency. * Support the commercialization of sustainable aviation fuels. * Develop new aircraft and propulsion technology that will eliminate drag, conceive of lighter materials and distribute propulsion in new ways. Signatories to the manifesto are: Grazia Vittadini (Airbus), Greg Hyslop (Boeing), Bruno Stoufflet (Dassault Aviation), Eric Ducharme (GE Aviation), Paul Stein (Rolls-Royce), Stephane Cueille (Safran) and Paul Eremenko (UTC). ■

JULY-AUGUST 2019 / ORIENT AVIATION / 7 NEWS BACKGROUNDER

Asia-Pacific LCCs third force at Paris Air Show

It is not often an air show introduces structural change. Yet Asia’s low-cost carriers did just that in Paris last month, reports Will Horton.

y changing their cost base and growth outlook by up-gauging orders and setting industry records for Bseating density Asia’s LCCs produced a third important result at the European show after the headlines of the A321XLR launch and Boeing’s 737 MAX deal with the International Airlines Group (IAG). At the show AirAsia revealed it had up-gauged 253 A320neos to the A321neo, leaving only 14 A320neo in its order backlog, a dramatic winding down of the A320 that has powered AirAsia’s growth for more than a decade. As well, Cebu Pacific, the Second-hand customers came more -900ERs than -800s. It has expected AirAsia to use A321s on most profitable carrier in the to expect A320 and 737-800 more A320neo on order than trunk and slot-restricted routes. Philippines, chose 16 A330neo availability. A321neo. The composition of its “It was a bit of a surprise,” to replace and increase its leased Larger narrow bodies had 737 MAX backlog is undisclosed. said the founder of Endau fleet of eight A330ceo. The deal been supplementary, ranging AirAsia’s 2016 order for 100 Analytics, Shukor Yusof. included 10 A321XLR and five from Eastar Jet’s two 737-900s A321neo aircraft cemented the Wider up-gauging appears all-economy 194 seat A320neo, to Jetstar Australia’s eight willingness of LCCs to use larger justified. Despite various an 8% increase on the 180-seat A321s. “While there is a readily narrow bodies. Some might market challenges, AirAsia’s configuration of the type only a available supply of A320s and argue AirAsia’s deal was late as Southeast Asian units reported few years ago. Cebu’s A330neo 737-800s, the up-gauges are less Spring Airlines had ordered the improvement in the first quarter will have 460 seats. Airbus will common,” said NYU Shanghai A321neo, VietJet had received with 87%-91% load factors modify exit doors to surpass the Adjunct Professor of Finance and its first A321ceo and HK Express and Revenue Available Seat A330’s certified maximum of an aircraft appraiser, David Yu. was a few months away from Kilometres (RASK) momentum. 440 seats. “There is fluctuation in pricing accepting its first A321ceo. Way Underlying demand strength The A320 and 737-800 on A321s and 737-900s because before all of them, Cebu Pacific has been evident, but so too have been the backbone of the there are less of them. They ordered the A321neo in 2011. have infrastructure constraints. region’s fleet, striking a balance come in waves.” Last year AirAsia flagged Yu believes airlines put off between operators’ preferences The biggest exception to it was re-evaluating its group confronting slot challenges. and lessor considerations and the pattern has been Lion Air, order book. Up-gauging was “They would not want to react the wider aftermarket. It created the launch customer for the expected, but in moderate until they had to,” he said. “The an ongoing cycle with airlines 737-900ER. Lion received its numbers. No one said the A321 constraint overhang has been favouring new A320s and 737- first -900ER in 2007, but its first would become its core asset, around for a while but has not 800s since residual values and -800 did not arrive at the carrier and the Centre for Aviation, kicked in until recently.” aftermarket demand were high. until 2012. Lion Air still operates in a September 2018 report, The turning point for AirAsia

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was partially due to external Switching from old the 243 commitments so far for considerations, Yusof said. generation baseline models such the A321XLR. The type’s launch “AirAsia appears to be taking as the A320 or the 737-800 and even key orders, such as its cue from some of its lessor in favour of a next generation from American Airlines, were partners,” he said. neo or MAX provides a range well reported before the Paris Air There is an argument LCCs of benefits that vary from the Show. are up-gauging in tandem A320neo to the A321XLR. More of a surprise was with full-service airlines. China Asia-Pacific airlines typically IAG’s announcement for 200 Airlines will replace 737-800s up-gauge for additional seats. 737 MAXs. The significance with A321neo. Cathay Dragon is Range is a secondary benefit. was multi-fold as the MAX is removing A320s and A321s for Jetstar’s domestic network still grounded and subject to only A321neo. SilkAir’s A319s largely features flights of less intense regulatory and industry deal underscores is buying at and A320s will be replaced than three hours while AirAsia scrutiny. It was the first MAX the bottom of the cycle and by 737-800s and MAX 8s. All typically only flies routes of no deal since the fatal March crash balancing OEMs. When asked if Nippon Airways short-haul more than four hours - as part of of Ethiopian Airlines flight 302. his timing secured an especially re-fleeting is tilted towards the an agreement with sister AirAsia IAG’s European airlines do not good discount, Walsh said he A321neo. X, which takes longer flights. operate the 737. IAG CEO, thought the deal was good for Full-service airlines appear Both of those airlines are linked Willie Walsh, gave a sweeping IAG and Boeing. to be up-gauging due to to longer-range variants. endorsement of the MAX’s Ryanair CEO, Michael regional congestion but also Jetstar is a customer for technical capabilities. O’Leary, has a history of buying because their smaller variants the A321LR, which can fly from Walsh pointed out he had 737s at the bottom of the did not always offer favourable Australia to Bali Denpasar. given an earlier interview that market. While other airlines economics for sizeable premium AirAsia X is considering adding discussed a likely MAX order. spoke about compensation for and economy cabins. So while the A321neo or A321LR to He also drew on IAG’s history, the MAX grounding, O’Leary full-service up-gauging leans thinner markets or off-peak noting British Airways (BA) had told CNBC: “I don’t need cash more towards necessity, LCCs are frequencies that do not require been a 737 operator, including compensation. I’d like to see up-gauging system-wide out of its 377-seat A330s. Seating from London Gatwick until 2015. some movement from Boeing opportunity. 192-236, the A321neo would The MAXs will be operated by on the pricing of aircraft and on In the last decade, more give 16% savings on variable BA, but also at all-Airbus Vueling future orders.” airlines have become publicly costs and could operate 64% and Level, an IAG statement said. Lufthansa Group CEO listed. Investors tend to first look of AirAsia X’s Malaysia network Before the air show, Boeing Carsten Spohr jokingly claimed at market growth, so up-gauging as of 2018. AirAsia X has said arranged for Walsh to visit a credit for IAG’s MAX deal, saying provides an opportunity to it would use A330s to “defend 737 MAX simulator with the at the group’s Capital Markets quell concerns about outlook markets”, subtly highlighting proposed software fix installed. Day: “I only mention it once and by arguing up-gauging is smart AirAsia X’s shift from start-up to Airbus indicated IAG had not Willie runs to buy 200.” growth, with low Cost per established carrier. asked Airbus for a formal request Under Spohr, the group has Available Seat Kilometre (CASK) Jetstar parent, the Qantas for proposal. changed its aircraft procurement or even CASK-neutral growth. Group, has announced 36 of Perhaps what the IAG MAX approach. “It’s way more effective to play the competition and to ride specific market cycles,” said Lufthansa Group Chief Officer Airline Resources & Operations Standards, Dr. Detleft Kayser. “We want to strike a better balance when it comes to the OEM balance – Boeing versus Airbus.” Lufthansa Group CCO Network Airlines, Harry Hohmeister, said the group could have a few A321XLRs to take advantage of range. Asia’s airlines would be interested in Hohmeister’s justification for not having a larger fleet of A321XLRs: “This aircraft is not a cargo provider.” ■

JULY-AUGUST 2019 / ORIENT AVIATION / 9 NEWS BACKGROUNDER

pilots. At present, cockpit crew cannot be on duty for longer Flying into the sun than 20 hours, which is less than the 23 hours, including time before and after the flight, Qantas Airways’ Project Sunrise, the barrier-breaking plan to required for Sydney-London link Sydney and Melbourne non-stop with London has grabbed flights. attention worldwide, but its launch is not set in stone, reports Regulators will need to be convinced crewing rosters will associate editor and chief correspondent, Tom Ballantyne. not lead to pilot fatigue and therefore be a threat to safety. “We are saying the current arrangement [with pilots] here is little doubt does not work so we need an Qantas Airways group efficiency change,” Joyce said. CEO, Alan Joyce, is “These aircraft will create a enthusiastic about huge amount of promotions. A breaking through one first officer typically is paid 55% Tof commercial aviation’s final of a captain’s salary and the barriers: linking eastern seaboard biggest thing a pilot can want is Australia with the UK non-stop. growth of an airline. But he is also pragmatic. The 21- “Sunrise means massive hour flight won’t be launched in growth for us and it would 2023 if the figures don’t add up. create a very fast promotional “When you are doing a CEO opportunity for a lot of pilots. job like this, which I have been They have to look at how they doing for a long time, you have to will miss that opportunity if know when to say ‘no’ as well,” they don’t give the productivity he said “And don’t worry about needed on the aircraft. it. If the business case does not “The best thing we can all work and we don’t get the right game changer. The last frontier protecting order slots for 2022 do for the success of Qantas long commercial vehicle from Boeing in aviation is to do Melbourne and 2023 and if the decision is term is to have a pilot agreement, or Airbus and we don’t get the and Sydney to London non-stop to go ahead Qantas will place an the manufacturers to give the right deal from the pilots and we which is, I think, the limits of order before year end with a view right price and do to this. can’t get over the commercial what anyone wants in aviation. to beginning flights in 2023. “It is a commercial risk. It hurdles, we will be ruthless. Both the manufacturers are There are several key issues is an exciting risk. I think it will “It’s our shareholders money calling this the moonshot. They to be settled. Joyce described work. and it’s going to be billions of are very keen and very eager to payload currently as “a moving “We have said that when dollars. If I am not convinced win.” feast” that was evolving as you look at where Sunrise works, and senior management is not Joyce has had “very good the manufacturers tested and London is a massive market. convinced that this is going to discussions” with both Airbus defined the aircraft. “If you look at Europe, Paris work, we will have no problem in and Boeing. The payload shortage varies is number two and Germany is killing the project.” “We are issuing a request on different aircraft. There will be number three. We think we can Joyce said good progress is for a final offer and the intention no freight on flights to London make Melbourne and Sydney to being made, particularly since is by August to have the results and there will be a loss of seats. London and potentially a service its non-stop Perth-London of that back. Hopefully, this The space will be used to provide from the east coast [of Australia] 787 flights, which have been will get us to a stage with the a zone for Economy passengers to Paris and potentially from the operating for more than a year, manufacturers on the price of to exercise, stretch and hydrate east coast to Frankfurt. The other have been successful. the aircraft, the guarantees on during the 21-hour journey. markets for Sunrise obviously “We have not made money the aircraft, which is fuel burn There will be enough room in are New York non-stop and on Sydney-London for ten years. and maintenance costs, and the first and business cabins Chicago non-stop and maybe Perth-London was profitable guarantees on performance for passengers to do the same another point on the east coast from day one,” Joyce said. and reliability because we are without the need to define a of the U.S. It opens up Sydney “Because of the success of flying these aircraft on very long separate zone. or Melbourne to Brazil which we this, we think Project Sunrise sectors. We need to get that Another critical element can’t do today – Sao Paulo and has the potential, but we are right. It is very important.” to pressing the go button is Rio – and more flights directly still working on it. This is a Airbus and Boeing are achieving a deal with the carrier’s into Africa.” ■

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build everything yourselves,” Fernandes said. Airlines “go beyond” He has clear digital aspirations which he often reveals directly on Twitter. Fernandes to identify IT talent likes to pitch the AirAsia group as a technology company with planes. Its website is its own By Will Horton company, which Fernandes said could have an IPO. Airlines today are bigger in production capability, but often smaller in focus as subsidiaries have been spun off or divested. Investors look for airlines with discipline and a focus on their core flying business. An activist shareholder wants Korean Air to distance itself from related companies. At the extreme end, HNA’s diversification is being unwound. Airlines can be under irline technology is let them be as they are. It’s is relevant for Cathay Pacific’s external shareholder pressure going back to the tough sometimes as a fellow typhoon-prone Hong Kong. to justify a wider portfolio with future. It was once entrepreneur because they’re Airline initiatives and IT investments that break the a global innovator very free-spirited. I do get my collaborative approaches established capital expenditure with solutions that two pennies’ worth in.” are necessary to those who mould of buying aircraft. The Aresolved known problems and Companies that airlines reckon a handful of technology irony is that even a major IT enabled unforeseen growth. acquire or invest in need heavyweights, especially Google, acquisition could be less than the Facilitating that development perseverance when confronting could control the travel industry cost of a narrow body aircraft were platforms made in-house, bureaucracy. They also may have and dictate terms. That is making and generate higher returns. externally or in collaboration. a different understanding of the venture capitalists and private Resistance can occur Airlines are returning to that issues airlines face and where equity weary of investing in internally. Even board directors entrepreneurial approach as they the pain points are, said Cathay companies that Google may may question investment in seek to end an industry cycle of Pacific Airways chief customer try to supersede with its own unfamiliar but innovative areas. under-investment and lagging and commercial officer, Paul product, the Australian Financial In his role at Cathay Loo can push innovation. Loo. “In order to work with the Review wrote earlier this month. for innovation speaking from It is now common to hear corporations, I would suggest Google may be more his experience in IT. “We were about airlines sponsoring that in addition to product, interested in the consumer-facing having a hard time even making hackathons and start-up you need to understand the side, like travel search and a small change to the extent that incubators. They are on the frustrations or the legacy of distribution. Loo said Cathay had the IT department became the prowl, willing to buy new corporations,” he said. good relations with Google and laughing stock of the company,” companies if the opportunity is Innovations from past also Alibaba and Amazon Web he said. right, as two airline leaders told decades were started or Services. “They bring in new Loo restructured IT to make the RISE start-up conference eventually taken up by multiple ideas and together we can focus it accountable and focused in Hong Kong this month. airlines. This could continue in on use cases,” he said. “They can on solving specific challenges. Acquisitions require cultural the current innovation cycle. use us as a test case.” Potential acquisitions have to be alignment, even at the AirAsia Cathay is open to other airlines AirAsia has found some good but also solve problems group headquarters where the using technology it finds. partners at start-up conferences. that have a wide impact or office has a slide, bean bags and “We don’t believe in keeping Options include outright alleviate an exasperating jeans are commonly worn. everything to ourselves. If purchases as well as acquisition problem. Loo said: “It’s about “We bought some start-ups it’s good for the industry, we of management teams that then supporting use cases. I have great and we allowed them to continue don’t mind to share,” Loo said. receive company equity. “We support from my boss and my being start-ups,” AirAsia Group Widespread use of technology want to continue to acquire or board to do all the right things boss, Tony Fernandes, said like disruption management joint venture. I believe that’s a for my customers and for our at the RISE conference. “We would strengthen hubs, which much better way than trying to front line.” ■

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GUANGZHOU ZHAOQING

HUIZHOU

FOSHAN DONGGUAN

SHENZHEN

ZHONGSHAN HONG KONG

JIANGMEN

ZHUHAI MACAU

WILL SLEEPY MACAU AWAKE? Macau is ending its aviation monopolies and is considering more airline entrants as China’s Greater Bay strategy takes hold in the Pearl River Delta.

Will Horton reports from Macau

epeat visitors to Macau make comparisons about cross strait flights between Mainland China and Taiwan the changed enclave: low-rise buildings to opened. Macau handled 8.3 million passengers in 2018. towering complexes, backwater to high end, AirAsia Group boss, Tony Fernandes, has said AirAsia marsh land to casino land. Yet aviation has would consider a local unit. AirAsia is Macau’s largest foreign changed little since the construction boom and airline if all its subsidiaries are treated as one entity. But Rthe doubling of visitors Macau has experienced in the last observers wonder what the benefits would be for AirAsia to decade. take such a step. The group already can link Macau with Now the Special Administrative Region (SAR) is finally many major countries via its existing airlines that are based in poised to grow and re-define the positioning of its considerably cheaper markets than Macau. under-utilised airport in expanding and congested southern A Macau base would not give access to the domestic China. And Macau’s regulators are helping. Chinese market, which AirAsia sought with its lapsed Recently, they declined to renew the historical concession AirAsia China joint venture. Strong desire for agreements that made aviation in Macau a series of Macau-mainland China flying would come up against Air monopolies from one airline to one ground handler. Investors Macau, which has a shareholder influential in regulatory are considering a new airline for Macau. Foreign airlines are matters: Air China. weighing growth out of the airport with expectations Utilising Macau as a transfer base between Northeast operating costs will be reduced. and Southeast Asia would not offer the scale of AirAsia’s In 2015 Macau surpassed its previous peak traffic existing major connecting points in Kuala Lumpur and achieved in 2007. The growth trajectory was halted when Bangkok.

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It also requires changing the perception of Macau as solely a gambling destination. AirAsia, like Macau tourism, intentionally excludes casinos from marketing material, but it is up against advertisements from the deep-pocketed gambling sector. “They have budget. They are creating this image to the outside market that Macau is about casinos,” Lao said. AirAsia does not subscribe to the view that Macau will What value does Fernandes see in setting up in Macau? develop into an alternative airport to congested Hong Kong. And is he serious? “I’m not surprised he said that, but whether Hong Kong International Airport is mostly full with its third we can do it is another thing,” said AirAsia Hong Kong and runway not scheduled for completion until 2024. Even after Macau CEO, Celia Lao. Lao has been with AirAsia since the the third runway opens, demand will be higher than capacity. group’s first flight to Macau in 2004, a quieter period that “We can never build fast enough,” Airport Authority saw Fernandes travel more within the group’s network and Hong Kong CEO, Fred Lam, said at the annual Airports take time to attend the Macau inaugural flight. Council International world conference in April. “With all AirAsia has expanded its flying and non-flying businesses the expansion plans that we all have – Hong Kong, and Fernandes has taken up interests outside aviation. Lao Shenzhen, Guangzhou – there will still be a shortage of said it was a homecoming for Fernandes when he returned to capacity,” he said. Macau two years ago and found that amongst the airport and The journey between Macau airport and Hong Kong is authorities, “the faces are the same, he’s talking to the same clunky. There is a ferry terminal near Macau airport but it is people”. not integrated with border clearance processing. After That continuity of leaders and support encouraged immigration clearance into Macau passengers must pass Fernandes to unexpectedly propose big plans. “He’s sending a through exit immigration thirty minutes later at the airport. message to the local government that AirAsia is open. The As well, the spread between Hong Kong and Macau air fares government is thinking which airline they want to introduce is not sufficiently attractive to galvanise passengers into as the second airline,” Lao said. “It’s something we need to considering alternatives. study further.” Awareness also is an issue and Lao said that rests with Macau has announced it will not renew Air Macau’s her. “How to change habits? An airline needs to lead,” she concession agreement that will expire in November 2020. The said. AirAsia is not grouping Macau and Hong Kong SAR has not outlined its plans to expand air transport licenses together on its website the way it would with co-terminal or say if it would permit one or multiple new entrants. airports, such as Tokyo Haneda and Tokyo Narita. It is a Macau is more than itself. It also is a gateway to the regulatory issue that can also apply to secondary European region. On average, half of the passengers on AirAsia’s Macau airports a considerable distance from the main city or to U.S. flights are from mainland China, stretching from Zhuhai, airports that function as cheaper gateways for Canada. “We which shares a land border with Macau, to Guangzhou. need to be very careful to stay on our marketing message,” Zhuhai has a local airport with few flights and is not targeted Lao said. for high growth by Mainland planners. Another potential option for AirAsia is application of Lao would like to see dedicated counters at immigration fifth freedom rights. Lao praised authorities in Macau for points for passengers transiting from China to Macau pursuing liberalisation. The AirAsia group has a limited fifth airport. The volume of land crossings means queues can be freedom history and Lao hinted Macau may be too small for unpredictable and often long. Dedicated counters would fifth freedoms now. “We need to balance demand from both speed journeys and provide consistency of planning. The ends,” she said. Greater Bay Area economic strategy calls for improved JC Cambodia International has started fifth freedom cooperation around southern China and could be the flights, with its Phnom Penh-Macau flight tagged with impetus to introduce the dedicated counters Lao seeks. Mandalay in both directions. This seems more an The remaining 50% of AirAsia’s Macau passengers are opportunity to be a local airline in the Macau-Myanmar split between Southeast Asia at 40% and Macau (10%), a market. Phnom Penh to Mandalay non-stop is shorter than reflection of the small local population. The Southeast Asian Macau-Mandalay. share varies by market. AirAsia’s Thailand flights can see Qatar Airways has received rights for a fifth freedom upwards of 70% Chinese passengers visiting Thailand, while cargo service from Macau to North America. Turkish the majority of AirAsia’s Malaysia flights are Malaysian Airlines was reported in the local Macau press to be interested leisure passengers. in a passenger service to Macau. Awareness of the region’s attractions needs to be Some wonder if this liberalisation, coupled with marketed, from waterparks to historical sites around permitting a second ground handler to open at the airport, Zhongshan. Promotions can be as simple as including could see Macau rely on foreign airlines. This could produce translations from Chinese to the main languages of growth for Macau while lowering political and economic risk passengers, Lao said. from allowing another local airline to enter the market.

JULY-AUGUST 2019 / ORIENT AVIATION / 15 COVER STORY

Ground handling is solely provided by Menzies Macau, a executive Joseph Said, who is seeking investors for the joint venture between global handler Menzies, Air Macau proposed short and long-haul airline. and other parties. Industry observers said ground handling in Viva Macau’s collapse was complex. It operated under a Macau is one of the most expensive and inflexible [in the sub-concession agreement with Air Macau. Air Macau region] because it is a monopoly operation. Lao would only vetoed various parts of Viva’s business plan, including acknowledge AirAsia’s ground costs are high. destinations Air Macau did not serve nor planned to do so. Managing partner of consultancy Skylight Aviation, There have been developments in low-cost strategies since Steven Dickson, said airlines should expect to pay more in Viva’s failure, so a new entrant would be advised not to avoid Macau relative to charges elsewhere in Asia. This has saddled a Viva revival. But Viva’s extraordinary situation also means Macau airport with having to especially incentivise new Viva’s history should not necessarily be a deterrent. services to overcome ground handling costs. “I think they’ve A new entrant would be in a different landscape because always been shown as cooperative,” he said of the airport and it would have greater freedom in a larger market. Also civil aviation authorities. “The evidence is in the number of changed is Air Macau, which has significantly improved routes and airlines.” from a decade ago. Under Air China ownership, Air Macau Macau is yet to announce the outcome of a public tender has stabilised and grown to be a local airline. It previously for a second ground handler, ending the Menzies monopoly. operated as a hub for mainland China-Taiwan flights before “I want to see a more competitive marketplace to support cross strait flights opened. Air Macau is re-fleeting. It growth from the customer and to create real competition in received its first A320neo in April. ground handling to better support the airline community,” Yet Air China seems to have limited Air Macau’s Dickson said. ambition, perhaps fulfilling enough local needs without But could a second ground handler radically lower costs infringing on neighbouring Cathay Pacific, in which Air – or gain scale? A new ground handler may have to wait to China holds a 29.9% equity. There is a similar dynamic at convert customers who have signed long-term deals with play across the Hong Kong border in Shenzhen, where Air Menzies to switch. China’s Shenzhen Airlines had a limited international Airlines are expanding their ground companies, footprint – and no long-haul flights – until the threat of commonly MRO but also in handling. There is intrigue local competition saw Shenzhen but worry if Macau’s ground handling tender selects Airlines expand. ■ Ground Team Red (GTR), a SATS-AirAsia joint venture with wide eyes. An intra-group ground handler could help AirAsia in Macau, but potentially not deliver a step change in charges for other airlines – or new entrants. One disclosed start-up is 888 Macau Airlines, founded by former Viva Macau Macau opens for lessor business acau will garner lessor interest as Air was better to calculate the costs and get the aircraft out of Macau refreshes its brand and start-ups Macau than risk having it remaining in Macau and fighting consider leased aircraft. Lessors should be in court,” he said. aware of Macau’s nuances, cautions Hugo Legal cases can be long in Macau and the extended time Maia Bandeira, a partner at Manuela allows creditor claims for the aircraft or for investors to MAntónio, a Macau law firm with a focus on aviation. Macau require the aircraft remain in the event the airline re-launches. is not a signatory to the Cape Town Convention, so The legal tussle over a Jet Airways 777 seized at Amsterdam securities and power of attorneys have to be thorough and in Schiphol is a reminder of leases going astray in complexities. line with Macau formalities. Macau is exploring being a leasing hub. Regulations “From our experience most of the lessors are used to changed in April loosening previously strict laws and also dealing with Cape Town signatories,” Maia Bandeira said. switched lessors from being treated as creditors to “When they come to Macau they want to bring their Cape classification as financial institutions. An undisclosed Town security.” He has found that the security aspect is portfolio of aircraft was moved from Dublin to Macau in late usually more challenging than the commercial negotiations. 2018, before the law ended, Maia Bandeira said. It is a Lessors were able to quickly recover Viva Macau aircraft possible test case of Macau’s potential, but he cautions home since the appropriate securities were in place, Maia Bandeira leasing developments will need to come with a big local said. But Viva’s collapse is a reminder of the rights of financial or political push. retention, from local fuel or maintenance costs. One lessor Neighbours Hong Kong and Nansha are developing had to pay a local supplier before taking a Viva aircraft. “It favourable aircraft leasing environments. ■

16 / ORIENT AVIATION / JULY-AUGUST 2019 NEWS BACKGROUNDER

Francisco gateway will eventually tell us we need to have a non- United Airlines re-aligns stop service to somewhere else in the Greater Bay Area,” Dias said. trans-Pacific network “Guangzhou continues to grow and transform itself from what it was even five years ago.” UA has to benefit from U.S. a sales office and a call centre in Guangzhou and roaming sales agents in Shenzhen. domestic connections It is working with the U.S. government to integrate its Hong Kong flights with ferry terminals around the Greater By Will Horton Bay Area. “We were the catalyst for bringing in the Department nited Airlines (UA) service with double daily of Homeland Security and is moving past its 777-200ERs. Chicago will Transportation to look at the merger to leverage remain a 777-200ER route. ferry terminals and make security combined assets. The additional San Francisco appropriate for people to In June, the carrier flight uses slots from the Guam check-in for a U.S. flight at the Uremoved “Continental” from its flight that will be cancelled as a ferry terminal,” Dias said. “A lot holding company name. It also is result of a downturn in greater of other places would like to have re-assigning its Hong Kong slots China tourism to the U.S. island facilities like that.” by ending a former Continental territory. Security still has to be Micronesia route to Guam in The second San Francisco completed at Hong Kong airport, favour of a second daily San flight will introduce new times but passengers can check their Francisco flight. for UA customers with evening bags and receive their boarding While the industry talks of doing 10 years ago”, he said. departures in both directions. passes upstream and then board declining yields and a possible “We were having trouble selling The new schedule will eliminate a ferry. UA is partnering with downturn, UA’s managing to our customers in the interior of one of UA’s three overnight Mainland booking engine, Ctrip, director Greater China and the U.S.” aircraft parkings in Hong Kong, to build packages that include Korea, Walter Dias, sees UA out- Better connections are where light maintenance was a free ferry ride to Hong Kong performing the market average. helping UA expand faster than provided by HAECO. Improved International Airport. The carrier’s Asia network, the the market average. After a aircraft utilisation is part of UA’s The carrier has backtracked largest of North America airlines, 5% increase in U.S.- China aim for low Cost per Available on starting secondary China is benefitting from improved passengers in the first five Seat Kilometre (CASK) growth. services. It has ended Xi’an and or new connections as it adds months of the year, forward It also will roll out a dedicated Hangzhou flights and scaled domestic capacity at a faster rate bookings are projecting 10% premium economy product. down frequencies on its only than its peers. industry growth in the next So far, Hong Kong has a remaining secondary destination, This was a long time coming four months, the peak summer higher booked load factor than Chengdu. “What’s happened for Dias, who joined UA from season. other destinations, Dias said. in the secondary cities right Continental, a carrier that had a “For the first five months More medium to long-term, now does not necessarily reflect better reputation than UA but we were well above the industry Dias expected UA to finally open opportunities in those secondary was much smaller in Asia. In his average. With all nine months non-stop flights to Guangzhou cities,” Dias said. Continental days, Dias envied the together we’re slightly above and later develop a joint venture A surge of growth to permutations UA had between the industry,” Dias said. “We’re with Air China. UA announced first tier cities saw airlines Asia and North America and also cautiously optimistic.” a Guangzhou-San Francisco offer discounted connections felt there were plenty of options UA’s plan for a second flight last decade but cancelled to secondary cities to fill UA had overlooked. daily Newark-Shanghai flight is it before launch at the onset trans-Pacific flights, Dias found, Dias told Orient Aviation looking promising after American of the Global Financial Crisis. which undermined the viability that when he heard UA’s new Airlines (AA) returned it to route The Guangzhou flight would of non-stop flights to secondary management would strategically authorities at the end of June. still likely connect with San cities. “There was too much grow domestic U.S. flights, “I In Hong Kong, UA has Francisco, UA’s hub for Asia, but overall capacity in the country. was sitting here in Hong Kong up-gauged Newark to a no announcement is expected The tier one cities have kind saying yes, finally, we’re going 777-300ER. From October, it soon – not even in 2020. of gone beyond the demand to do what we should have been will replace a daily 777-300ER “The power of that San curve,” he said. ■

JULY-AUGUST 2019 / ORIENT AVIATION / 17 NEWS BACKGROUNDER

Biometric checks represented a “step change” in taking a more Biometrics to eliminate risk-based approach to security. It would free up about 40% of terminal space because some document duplication airport zones would no longer be required to be quarantined. IATA has received the backing at congested airports? of the World Travel & Tourism Council (WTTC). Its president, Gloria Guevera said “biometric Airlines believe biometrics will be a step change in improving technology is the future of travel. passenger processing at the region’s airports. It’s very simple. The faster we act, the faster we reap the benefits of the growth that accompanies the adoption of biometrics – namely Associate editor, Tom Ballantyne, reports increased security, efficiencies and a better traveller journey”. f ever there was evidence “We have missed the airport and air traffic capacity opportunity to have a single is lagging far behind the solution so it is crucial we move demands of airlines for slots faster to define global standards and airspace it was in Europe for the use of technology in the Ilast year. The continent’s air traffic traveller journey,” she said. management shortcomings IATA’s Careen estimated were revealed by International it would take five to ten years Air Transport Association (IATA) before biometric IDs are fully director general and CEO, adopted at all airports across Alexandre de Juniac, at an the globe. “You’re going to see industry conference last month. pockets of implementation,” he “In 2018, aircraft flying in said. “There is not one airport Europe experienced 19.1 million on the planet handling 10 million minutes of en-route delays. That’s passengers annually that does 36 years of wasted time that not have a plan to introduce unnecessarily added 5.6% to some sort of biometrics into the our European carbon footprint. passenger journey.” The prime causes are inadequate Guevera said with passenger capacity and staff rostering,” he numbers doubling by 2035 it said. Billions of dollars are being identity checks at airports. was clear there would not be “These are fixable and spent on infrastructure to “The reason for One ID is a corresponding increase in that makes poor performance improve air traffic flow, but in the we are talking about two times infrastructure. “Companies that all the more disappointing. meantime, airlines are turning growth [in air passenger demand] adopt biometrics early will have Unfortunately, this is not an to other solutions to unclog by 2035. We’re not going to be a competitive advantage in the isolated example. There are air airways and airports. Measures able to do what we do today in market,” she said. traffic bottlenecks in China, the include improved slot allocation the same way,” explained IATA’s “It was recently reported U.S., the Gulf and elsewhere.” and biometrics to quicken a senior vice president airport, that 71% of airlines and 77% Europe’s problems, and there passenger’s journey through an passenger and cargo capacity, of airports are researching are forecasts it will be as bad airport. Nick Careen. One ID is “crucial to or implementing biometric this year, don’t only impact local At the annual IATA AGM growth”, he said. programs. We are calling for the airlines. They hit the hundreds of this year, delegates passed a IATA is taking a three aviation industry to overcome airlines flying to and from Europe motion to implement IATA’s pillar approach to the fragmentation.” from across the globe, including One ID biometric identity biometrics issue, based on IATA’s de Juniac said a single the Asia-Pacific. The delays initiative. One ID is a single “harmonization, standardization biometric token required “careful cost carriers millions of dollars a biometic ID, taken from a and interoperability”. As well planning, broad consultation with year in fuel costs. Delays in the fingerprint, an iris or by using as benefits for passengers, users, examination of funding Asia-Pacific are just as frequent, facial recognition technology, Careen pointed out there are options and a keen focus on IATA said. that reduces the number of bonuses for safety and security. affordability.” ■

18 / ORIENT AVIATION / JULY-AUGUST 2019 INDUSTRY INSIGHT SPECIAL REPORT THE FUTURE OF AIRLINE TRAVEL BOOKING In the palm of your hand

obile technology Narayanan, told Orient Aviation. experiences and that engage has eaten “A growing emphasis on customers in new ways – from voraciously into personalization means airlines acquisition to loyalty – is the business of have had to adapt their content becoming necessary for airlines. travel bookings. creation (retailing) distribution Unlike traditional loyalty MFor decades, the margins of and fulfillment,” he said. programs, the next generation Global Distribution Systems In the Asia-Pacific, airlines of them will allow airlines to (GDSs) were fat, often averaging are looking at comprehensive better market to consumers US$10-$12 per transaction. Now distribution models for New in the digital space regardless travel consumers are bypassing Distribution Capability (NDC) of the program on which they travel agencies, which is the content, which means that book, strengthening their ability major source of revenue for the content available on their to retain and attract customers GDSs, to book directly with websites also will be accessible while spurring new revenue airlines or hotels after they have on the GDS providing a fair, by having richer portraits of done their comparison shopping non-discriminatory distribution those who travel with them, online. model for travelers and travel Narayanan said. The airline industry is being agents. Historically, GDSs would years has been smartphones. driven by shifts in consumer Optimised loyalty create offers by combining Nowadays, smartphones are the behavior, the quick evolution management capabilities, schedules, fares and inventory most common medium used to of technology and continued with NDC’s evolution, mean based on demand. Now GDSs make reservations for travelers. pressure to optimize revenue personalized retailing will will aggregate and distribute Travelport’s Global Digital across all streams of operations. become the norm. Airlines want both NDC and non-NDC-enabled Traveler Research 2018 found “Sabre has observed three the ability to know all about their content seamlessly for travel about half of travelers in the trends the airline travel booking customers, regardless of the agents to provide the best entire Asia-Pacific make flight space is facing in the Asia-Pacific platform on which they make options for travelers. and hotel reservations on mobile and the world, the company’s their bookings. Travelport vice president devices.” Travel Solutions Airline Sales vice Having the technology to Asia-Pacific Air commerce, Sixty one per cent of tourists president and general manager create comprehensive marketing Chris Ramm said: “The biggest download travel apps on their South Asia and Pacific, Rakesh programs that deliver unique driver of change in recent smartphones before their trips and 88% of tourists access information digitally while traveling, the study revealed. With only the size of a palm for display, the priority for airlines and travel agents is to exhibit the necessary information in the most effective way, using AI technologies,” Ramm said. Everything has changed from design layouts to data processing methods, which should continue to transform customers’ booking behaviors and preferences. Mobile remains crucial, but travelers also want a consolidated experience across multiple platforms. On average, travelers use 10-12 apps for the

JULY-AUGUST 2019 / ORIENT AVIATION / 19 INDUSTRY INSIGHT SPECIAL REPORT THE FUTURE OF AIRLINE TRAVEL BOOKING

the Asia-Pacific is an interesting region to observe. In future, dynamic pricing will proceed by NDC and will enable full-service airlines to distribute additional fare price points, providing better opportunities to compete with LCCs and ultimately better serve their customers. Today’s travelers are hungry for information compared with the past. With airlines offering more complicated fares and offers, customers are eager to understand what they are paying and why. By mastering insights derived from Big Data, airlines and agents can enhance travelers’ experiences, encourage repeat trips and attract new customers with personalized offers research, booking and traveling 70% of tourists today share airlines need to identify their and demand-led marketing, for their trips. Not being able their travel experiences on social customers. Operating in a highly Travelport said. to access all information across media and one out of five has regulated and competitive Big Data allows companies all devices and platforms is said they are influenced by these environment, airlines must to identify increases or decreases regarded as a pain point by the travel postings. embrace the mindset of retailers in advanced bookings to majority. In recent years, full-service to cater to the changing certain destinations as change The Travelport study also carriers and low-cost carriers behaviors of travelers. is taking effect and provides revealed more than half of global have been diversifying their Home to many LCCs and opportunities to adjust their travelers have used voice to distribution channels because online travel agencies (OTAs), offers accordingly. ■ search for information during booking or traveling. But the region remains a Hahn Air heralds NDC segmented market for voice search. Sixty eight per cent of Hahn Air’s head of corporate strategy, industry GDS content and travelers have the freedom to shop travelers in Indonesia have used and government affairs, Jorg Troester said: “What directly for the most attractive, best priced deals. voice search to research travel, was unthinkable 30 years ago is standard procedure The NDC and the ONE order initiative will but in Japan and Singapore today with airlines selling unbundled services and accelerate these trends by making airline content the figures drop to less than generating a large amount of their revenue from easily available to travel agents, meta search engines 45%, which is below the global sales of ancillary products. This trend is bound to and new providers such as Blockchain-based average. continue.” channels. The trend of increasingly Travel agents have access to the full suite of It is important for airlines to take heed of using smartphones is more the offerings of airlines, way beyond the traditional looming developments, Troester said. prevalent among millennials but the adequacy and availability of digital trip management can be a major point of frustration for them. Compared with previous generations, millennials place greater emphasis on unique travel experiences than Generation X or other generations who are more concerned with tangible benefits. As a whole, close to

20 / ORIENT AVIATION / JULY-AUGUST 2019 NEWS BACKGROUNDER

Rush to fill route gap after Jet Airways grounding

By associate editor and chief correspondent, Tom Ballantyne

he collapse of “temporary” there are doubts it Jet Airways is a will return to the air. Lessors have dramatic pause in taken back their planes from the the remarkable rise airline and the Indian government of India’s commercial has distributed the carrier’s Taviation market. domestic and international rights, But that won’t last for long temporarily, to rival airlines. said consultancy, CAPA. Fellow A large number of Jet’s analysts with an eye on India aircraft, which lessors have collectively agree. Growth is claimed due to lapsed payments forecast to resume by the end have been leased to SpiceJet. of September with the country’s “SpiceJet is strengthening three leading LCCs predicted to growth rate in more than five alone could be on track to report and emerging as the clear No.2 report record profits. years and is largely due to the a profit of US$400-$500 million. airline in the market. Within 12 India has long been one demise of Jet Airways,” IATA said. Meanwhile, the combined fleet months, its domestic share could of the world’s fastest growing “This sizeable supply side size of Indian LCCs is expected to approach 25% of the market, aviation markets, consistently interruption has not yet been cross 500 aircraft this year,” the a size that accords it strategic reporting annual air traffic offset by other carriers, resulting consultancy said. importance in the sector. This is a expansion in excess of 20%. in Available Seat Kilometres (ASK) Overall, domestic air traffic tremendous achievement for an “After a sustained period of growth slowing sharply to 0.5% growth will be “muted”, with a airline that was within hours of very strong growth, Revenue year-on-year compared with an full-year increase expected to be closure less than five years ago,” Passenger Kilometres (RPKs) in averaged pace of 15% in the past below 5% percent year-on-year. CAPA said. the domestic India market are two years. More broadly, rising After the Jet Airways crisis The Jet Airways crisis has 0.5% lower in April than their airfares in recent months likely “recovery in the international left a significant gap in the year ago levels, down from a 15% have weighed upon passenger sector may take one to two international market, which will year-on-year pace as recently as demand.” years”, with international traffic encourage airlines such as IndiGo, December,” the International Nevertheless, CAPA said to remain “flat at best” with a SpiceJet and GoAir to increase Air Transport Association (IATA) the three leading Indian LCCs - possible decline of up to 5%, their focus on international said in its latest global passenger IndiGo, SpiceJet and GoAir - will CAPA said. opportunities. Indian LCCs are forecast. The market has since be in the money and could be Jet Airways has been expected to add 40 narrow bodies improved. reporting record profits in their grounded since April 17 and to their international operations in “This is the first negative 2019-2020 fiscal years. “IndiGo although it says the shutdown is 2019 to 2020. ■

JULY-AUGUST 2019 / ORIENT AVIATION / 21 INDUSTRY ADDENDUM

Honeywell Forge aims for Mitsui & Co. Ltd, an investor in LanzaTech’s catalytic technology. Later this year, ANA efficient fleet management will test LanzaTech SAF made from industrial waste emissions on an ANA delivery Honeywell Forge for Airlines is a new flight. The SAF will be blended with 50% analytics based software platform that will conventional jet fuel to ease the transition to forecast savings for airlines based on data full sustainability, the airline said. ■ driven decisions. “Airlines need an easy solution to analyse and manage their costs in one place and MRO Honeywell is providing it by unlocking their data to create what is essentially their own profit calculator,” said Honeywell Connected Enterprise Aerospace vice president and of our aircraft undergoing maintenance general manager, John Peterson. in Singapore and believe drones will The platform offers: improve inspection quality. There may be * the most productive flight plan based on opportunities to use it in New Zealand, for real-time conditions example ad hoc inspections after lightning * forecasts to guide more fuel efficient strikes.” flights ST Engineering Aerospace sector * predictive maintenance alerts to deputy president, Jeffrey Lam, said: minimize airline down time “incorporating innovative technologies * information that will reduce departure to into aviation MRO holds great potential to arrival times including alerts for turbulence enhance aircraft servicing. We are happy to and flying in poor weather be working with Air New Zealand because * an integrated platform allows carriers it shares the same belief in exploring customisation from airline specific Air New Zealand trials ST technologies that improve MRO.” algorithms. ■ The Auckland-headquartered carrier Engineering drones to and ST Engineering also are collaborating on inspect its aircraft the manufacture of 3D printed replacement Lanza to supply All Nippon aircraft interior parts and in predictive data Airways with sustainable Industry leader, Air New Zealand and ST analysis to optimize MRO efficiencies.■ Engineering are testing drones for aircraft aviation fuel MRO inspections at the aerospace company’s facility adjacent to Changi Singapore Airport. AFI KLM E&M and Airbus All Nippon Airways (ANA), a leader in the The global MRO has produced a drone, explore virtual engine MRO region in striving for reduced CO2 emissions DroScan, that travels around the surface from flying, has signed an offtake agreement of the aircraft taking images. Algorithms Airbus and global MRO, AFI KLM E&M, are with joint venture, LanzaTech Inc., to purchase process the images to detect and classify establishing a technical and commercial its sustainable aviation fuel product (SAF) for defects that are passed to engineers for partnership to develop and manage a virtual delivery from 2021. repairs. engine run-up, PC-based training solution for Lanza and Pacific Northwest National Air New Zealand chief ground A320 maintenance. Labs, have developed gas fermentation operations officer, Carrie Hurihanganui, The new platform is intended to replace technology and associated processes said using the drone to inspect aircraft takes simulator training sessions and will be that produce ethanol and ultimately the two hours instead of up to six, making for available in the training centres of the two commercial processes that manufacture SAF. more cost efficient airline operations. companies and also at outstations and In 2018, ANA signed a partnership with “We have trialled Droscan on a number customer bases. The software solution allows the monitoring of three PC stations: one for the instructor to observe the progress of trainees and one each for the trainee – the captain and the officer. All trainees will be equipped with 3D goggles to fully utilize the system’s high definition immersive 3D simulation, based on real time operation procedures and in-service MRO requirements. ■

22 / ORIENT AVIATION / JULY-AUGUST 2019 No.1 Asia-Pacific commercial aviation magazine

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