Singapore Prepares for Asia's Biggest Air Show
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VOL 5, NO. 1 FEBRUARY 2008 ASIA’S ONLY COMPREHENSIVE INDEPENDENT INDUSTRY PUBLICATION Singapore prepares for Asia’s biggest air show Star Alliance welcomes FAA approves Gulfstream Airservices pursues AsianAviation | FEBRUARY 2008 1 Chinese member airlines synthetic vision green initiatives WHEN IT COMES TO EMISSIONS WE KEEP GOING LOWER AND LOWER. Nobody lowers the emission levels bar as consistently as CFM™ . Current lifetime fleet operations figures and ICAO data support it. Since introducing our high-bypass turbofan to the single aisle market, our commitment to improving fuel burn and reducing emissions has been a matter of record. We have continually lowered CO2, NOx, and noise. Our new Tech Insertion engines are certified as much as 25% below new CAEP6 standards for NOx. Thousands of engines already in service can achieve significant improvements from our ecological, economical upgrade programs. Get the full low-down. Visit CFM56.com now. CFM, CFM56 and the CFM logo are all trademarks of CFM International, a 50/50 joint company of Snecma and General Electric Co. contents >> Regulars VIEWPOINT India’s airlines restructure for profi tability ..................03 22 GENERAL NEWS Boeing’s 787 faces fresh delays ...............................06 AIR TRANSPORT Indonesia sells Merpati stake ................................... 08 DEFENCE Australia tests KC-30 refuelling ............................... 12 12 BUSINESS AVIATION Cessna announces large-cabin jet programme ........ 15 NEWS ANALYSIS Cargo carriers face the music on price fi xing ........... 16 >> Features AAPA urges airlines to boost profi tability ................. 18 29 A380 fi rst fl ight picture exclusive ............................ 22 Australia tackles pilot shortage ................................ 24 16 Singapore positions as aerospace hub ..................... 28 31 RSAF’s future procurement needs ............................ 31 Asia embraces business aviation .............................. 34 Viva Macau’s expansion ambitions .......................... 36 MAS, Qantas plan maintenance venture ................. 40 Cautious optimism for air-freight industry ............... 42 35Asia-Pacifi c air freight directory ............................... 44 42 Singapore’s Tiger Airways in focus ........................... 50 MICA (P) 198/02/2007 Graphic Design China, Hong Kong & Macau Mobile: +33 (0)6 6252 2547 Craig O’Neill Roger Loo Email: [email protected] Editor Phone: +65 9386 7934 Andrzej Jeziorski Head Offi ce - Singapore Italy Fax: +65 6534 8186 Phone: + 1 604 408 5980 Asian Press Group Pte Ltd GAME Sri Email: [email protected] Mobile: + 1 778 227 8265 Raymond Boey, Regional Manager Ida de Mari Email: [email protected] Block 729 #04-4280 Japan & Korea Phone: +39 010 589 752 Ang Mo Kio, Avenue 6 Chris Kuang Associate Editor Fax: +39 010 562193 Emma Kelly Singapore 560729 Phone: +65 9846 6617 Email: [email protected] Email: [email protected] Phone: +65 6457 2340 Fax: +65 6534 8186 Fax: +65 6456 2700 Email: [email protected] Russia & CIS Publisher & Editor-in-Chief Email: [email protected] Laguk Co. Singapore & South East Asia Peter La Franchi Web: www.asianaviation.com Yuri Laskin, Sergei Kirshin Norman Thng Phone: +61 417 476 791 Phone: + 7 495 912 1346 Subscriptions Phone: +65 6534 8186 Email: [email protected] Fax: + 7 495 912 1260 Rose Jeffree Fax: +65 6327 8148 Email: [email protected] Group Publisher & Managing Director Email: [email protected] Email: [email protected] Ross Butler North & South America & Canada Advertising Offi ces & Representation Taiwan Contributors James Hwang Daly Associates Australia & New Zealand Kuala Lumpur: Dennis William Phone: +886 2 2805 0235 Joan Daly Europe: Ian Goold Ross Butler Fax: +886 2 2805 0224 Phone: 703.938.5907 Hong Kong: Kenne Chan PO Box 88 Mobile: +886 918 172 741 Fax: 703.938.5910 Chicken Wings: Stefan Strasser Miranda Email: [email protected] Mobile: 703.407.3204 NSW 1490 Australia Chief Photographer Email: [email protected] Phone: + 61 2 9526 7188 Europe (except Italy) Sam Chui Fax: + 61 2 9526 1779 Diana Scogna Printer Photographer Mobile: + 61 (0)410 529 325 Phone: +33 1 4315 9829 Sun Rise Printing & Supplies Pte Ltd Weimeng Email: [email protected] Fax: +33 1 4033 9930 ISSN 1449-3233 AsianAviation | FEBRUARY 2008 3 viewpoint More consolidation for India’s airlines Back in November, Kingfi sher Airlines CEO Vijay Mallya gave It has been a turbulent few years for the Indian industry. an address to the Centre for Asia Pacifi c Aviation’s Outlook Between the beginning of 2005 and mid-2006, total domestic Summit, where he spoke about his company’s acquisition of a capacity grew 48 percent, while low-cost carriers grabbed an substantial stake in low-cost carrier Air Deccan. increased share of the market – rising from 22 percent in early Th e biggest winner from a tie-up between the two carriers 2006 to more than 30 percent by the end of that year. would be the national airline industry, he said. Th e country’s For Jet Airways, a shift in the ratio of full-fare to discount fast-expanding industry was now suff ering losses as a result of passengers from 65:35 to 35:65 between the second and third brutal fare wars between domestic start-ups and consolidation quarter of 2006 meant yields plunged, as fuel and other costs was a necessary move. rose. Th e second quarter of that year saw 6 percent smaller Andrzej Jeziorski Before Deccan arrived on the scene in 2003, a fl ight from yields than a year earlier – with a 9 percent drop held off only Bangalore to Delhi cost about 12,000 rupees (US$303) on by the introduction of fuel surcharges. one of three carriers that served the route. Aft er the low-cost “I think everyone has had about enough,” Mallya said. “We carrier established itself, the fare plunged to an average 2,500 are not looking to operate as cartels or exploit consumers, rupees, stimulating demand but also creating “a lot of balance but we do want to make some money and insert some sanity sheets splashed all over with red ink”. into the industry. In a few years, I think we will see preserved Now, Deccan and Kingfi sher have confi rmed the will business models [both low-cost and full-service], but a vastly complete a fully-fl edged merger in April (see related story, improved bottom line.” page 7), following the merger last year of state-owned Air Th e Kingfi sher chief added that, with his airline’s full-service India with Indian Airlines and the takeover of Air Sahara by Jet philosophy, combined with Deccan’s no-frills approach, he Airways. Now India has three major airline groups, controlling will be able to off er “both the lowest fares in the market, as well 83 percent of the domestic market, which Mallya says will as the highest”. Perhaps we will now see India’s airline boom herald a return to sustainable pricing and operations. settling into more sustainable, steady growth. O Australia’s air combat conundrum According to a paper published in January by the Australian a decision on its A$12-15 billion (US$11-13 billion) JSF Strategic Policy Institute (ASPI), the country faces tensions procurement. Any further slips in the JSF development between the timeframes for its air combat review, the programme could leave Australia with a need for more development of a Defence White Paper and decision points air combat aircraft , with the current force of F/A-18s for the acquisition of Lockheed Martin F-35 Joint Strike scheduled to keep fl ying until 2018 thanks to an upgrade Fighters (JSFs) and Boeing F/A-18F Super Hornets. programme. Australia’s new Labour government has initiated a review Th e Super Hornet could provide that solution, but its of its air defence procurement needs, including the planned capabilities have been called into question, compared with JSF acquisition and the previous government’s order for other front-line fi ghters in service in the region. If the 24 Super Hornets as replacements for venerable General country does decide to cancel the previous government’s Dynamics F-111s. ASPI is now urging the government to order for this aircraft , it would face substantial penalties. allow the review to be run by an independent analyst with “Any decision to terminate the Super Hornet contract extensive aerospace knowledge. will need to be accompanied by a plan to manage air combat “A ‘blank sheet’ approach that makes no assumptions capability in the period 2010-2015,” ASPI says. about the types to be operated makes sense, but will “Th ere seems to be no real impediment to deferring a consume time and resources,” ASPI says. decision on Australia’s acquisition of the JSF beyond 2008,” Th e government’s planned Defence White Paper would the institute concludes. “As well as giving the review time help in decision making for the review, but that document to determine a long-term solution, additional schedule, is not expected to be completed until late this year, at cost and performance data from the JSF programme will about the same time that Australia is scheduled to make be available at a later date.” O AsianAviation | FEBRUARY 2008 5 news First deliveries of the 787 are now expected to take place in the fi rst quarter of 2009. Thai AirAsia suffers annual loss in 2007 Thai AirAsia, the Bangkok-based affi liate of Malaysian low-cost carrier AirAsia, says it made a loss last year as costs increased and competition intensifi ed. However, AirAsia, which owns 49 percent of the carrier, has denied initial reports that the carrier lost 1 billion baht (US$32 million) during the year. The Malaysian company says the loss is expected as a result of “rampant undercutting” of fares on domestic routes, combined with higher fuel costs and an accounting change, bringing the carrier’s Boeing announces further 787 delays maintenance accounting in line with industry standards.