VOL. 7 NO. 9 JUL/AUG 2000 COVER STORY N E W S Asiana pilots want union parity with Korean Air 11 Asian airlines back international noise initiative 31 ASIA’S FAA’s overflight charges and security upgrades criticised 34 Philippine Airlines stopping the rot 38 A3XX Page 24 Alliances face first real tests 42 EXCLUSIVE: Air NZ completes Ansett buy-out 44 Airbus Industrie chief IATA chief calls for countries to relax foreign ownership rules 48 executive Noel Forgeard Business digest 57 talks to Orient Aviation FEATURES Major changes and challenges for China’s aviation industry ahead 16 Asia key region as SAir builds its own world alliance 46 S P E C I A L R E P O R T European investment in the Asia-Pacific aviation industry MTU signs maintenance centre deal with China Southern 51 Snecma gives Asia big vote of confidence 52 Rolls-Royce opts for joint venture strategy in Asia 53 Major expansion in region for Lufthansa Technik 54 DASA meeting its targets 55 COMMENT Behind the Cockpit Door by The Captain 56 Turbulence by Tom Ballantyne 62 I N F L I G H T A S I A A 16-page pull-out dedicated to onboard services and technology. In this issue: Big two caterers go “E”; Part Two of World Airline Entertainment Association special report; Network: news and people moves. PUBLISHER ADVERTISING Wilson Press Ltd Hong Kong & China: Asia : Association of Asia Pacific Airlines GPO Box 11435 Hong Kong Wellington Ng Wilson Press Ltd Secretariat Tel: Editorial (852) 2893 3676 Tel: (852) 2893 3676 Christine McGee Suite 9.01, 9/F, Fax: Editorial (852) 2892 2846 Tel: (852) 2893 3676 Kompleks Antarabangsa, E-mail: [email protected] Photographers Fax: (852) 2892 2846 Jalan Sultan Ismail, Andrew Hunt (chief photographer), 50250 Kuala Lumpur, Malaysia. Publisher and Managing Editor Rob Finlayson, Hiro Murai The Americas / Canada : Director General: Richard Stirland Barry Grindrod Robyn Tucker International Marketing Commercial Director: Carlos Chua Design & Production Robyn Tucker Technical Director: Leroy Keith Joint Publisher Ü Design + Production Tel: (1-441) 295 8200 Tel: (603) 245 5600 Christine McGee Fax: (1-441) 295 8210 Fax: (603) 245 2500 Colour Separations Chief Correspondent Twinstar Graphic Arts Co. Europe : Published 10 times a year Tom Ballantyne REM International February, March, April, May, June, Tel: (612) 9638 6895 Printing Stephane de Remusat July/August, September, October, Fax: (612) 9684 2776 Lammar Offset Tel: (33 5) 34 27 01 30 November and December/January. Printing Company Ltd Fax: (33 5) 34 27 01 31 © All rights reserved Special Correspondent Wilson Press Ltd, Hong Kong, 2000. Patrick Garrett Distributed by Wilson Press Ltd The views expressed in this magazine are not necessarily those of the Association of Asia Pacific Airlines. Jul/Aug 2000 | Orient Aviation | 3 PUBLISHER’S LETTER RIGHT MOVES IN CHINA n our main story, “China’s Challenge”, a former official of the CAAC, which has often been criticised for being regulator AND Civil Aviation Administration of China (CAAC) told Orient airline operator, is to concentrate on the regulating, said Zhang. IAviation that all the recent talk of radical reform of his nation’s Operating China’s top eight airlines, and none too impartially aviation industry will become fact in the not-too-distant future. at that, is a throwback to the days when the CAAC was the only He said a strategy paper being considered by mainland China’s airline. In recent times, it has been accused of favouring its carriers supreme policy-making body has recommended the country’s in route allocation to the detriment of some better run provincial airlines be restructured into four lead groupings in a bid to airlines, and protecting its ‘friends’ by imposing unworkable eliminate industry losers and promote the well-managed, the ticket pricing regulations that cancelled out competitiveness in improving and the profitable airlines. the market. The aviation world has heard this talk before. So far it has But when it regulates the CAAC has not done too badly, come to nothing. particularly in the area of safety. Somewhere along the way to policy implementation, the jobs Today, China’s record is as good, if not better, than most areas of long-serving cadres have been threatened. Politics is blamed of the world. This is a great improvement on the early Nineties for aborting change. when airline accidents happened regularly. This time it is different, said Zhang Baojian, now government China’s aviation industry appears to be heading in the right and industry affairs director, North Asia for the International Air direction – on paper. All we need now is some action. Transport Association (IATA). The more worldly presidents of both the major airlines and successful second-tier carriers know the industry cannot achieve its much-mooted potential without weeding out the dead wood among carriers. Good airlines must be free from the CAAC’s BARRY GRINDROD intervention in their management. Publisher/Managing Editor And this brings us to the other equally important reform. The The Association of Asia Pacific Airlines members and contact list: Air New Zealand Dragonair Philippine Airlines Managing Director, Mr Jim McCrea Chief Executive Officer, Mr Stanley Hui Chairman, Mr Lucio Tan GM Govt & International Affairs, Corporate Communication Manager, VP Corporate Communications, Mr Graeme McDowall Ms Laura Ayson Mr Rolando Estabilio Tel: (649) 366 2605 Fax: (649) 309 4134 Tel: (852) 2590 1260 Fax: (852) 2590 1333 Tel: (632) 817 1234 Fax: (632) 817 8689 All Nippon Airways EVA Air Qantas Airways Chairman, Mr Kichisaburo Nomura President, Mr Frank Hsu Managing Director, Mr James Strong Director, Public Relations, Mr Koji Ohno Deputy Senior Vice President, Mr K. W. Nieh Director of Public Affairs, Mr Bernard Shirley Tel: (81 3) 5756 5675 Fax: (81 3) 5756 5679 Tel: (8862) 8500 2585 Fax: (8862) 2501 7599 Tel: (612) 9691 3760 Fax: (612) 9691 4187 Ansett Australia Garuda Indonesia Royal Brunei Airlines EGM: Mr Craig Wallace President, Mr Abdulgani Chairman, Dato Paduka Awang Haji Alimin EGM Corporate Affairs, Ms Pamela Catty VP Corporate Affairs, Mr Pujobroto Bin Haji Abdul Wahab Tel: (631) 9623 3471 Fax: (613) 9623 3663 Tel: (6221) 380 0592 Fax: (6221) 368 031 Tel: (673 2) 343 368 Fax: (673 2) 343 335 Asiana Airlines Japan Airlines Singapore Airlines President, Mr Park Sam Koo President, Mr Isao Kaneko Deputy Chairman and CEO, Managing Director, PR, Mr Hong Lae Kim Director, Public Relations, Mr Geoffrey Tudor Dr Cheong Choong Kong Tel: (822) 758 8161 Fax: (822) 758 8008 Tel: (813) 5460 3109 Fax: (813) 5460 5910 VP Public Affairs, Mr Rick Clements Tel: (65) 541 4030 Fax: (65) 545 6083 Cathay Pacific Airways Korean Air Chief Executive Officer, Mr David Turnbull President and CEO, Mr Shim Yi Taek Thai Airways International Corporate Communications Manager, VP Public Relations, Mr Seung Jae Noh President, Mr Thamnoon Wanglee Quince Chong Tel: (822) 656 7092 Fax: (822) 656 7288/89 Director, PR, Mrs Sunathee Isvarphornchai Tel: (852) 2747 5214 Fax: (852) 2141 5214 Tel: (662) 513 3364 Fax: (662) 545 3891 Malaysia Airlines China Airlines Chairman, Tan Sri Tajudin Ramli Vietnam Airlines President, Mr Sandy K. Y. Liu Head of Industry Affairs, President and CEO, Mr Dao Manh Nhuong Director, Public Relations, Mr Scott Shih Ms R. Nordiana Zainal Shah Dep Director, Corp Affairs, Nguyen Huy Hieu Tel: (8862) 2514 5750 Fax: (8862) 2514 5754 Tel: (603) 2165 5154 Fax: (603) 2163 3178 Tel: (84-4) 873 0928 Fax: (84-4) 827 2291 Jul/Aug 2000 | Orient Aviation | PERSPECTIVE ATCHET BURIED: Rod Eddington is Thamnoon Wanglee, is still saying non! He HOST WITH THE MOST: Qantas Airways wasting no time pushing his new insists he is staying put with Star. and its boss, James Strong, who was the re- Hbroom through British Airways (BA), tiring IATA chairman of governors in Sydney, but even those closest to the new BA chief BETS ON: A rumour from who knows turned on a stylish harbourside banquet, op- executive were surprised to hear he had where, that Malaysia Airlines (MAS) would posite a luminous Opera House, with the food lunch with the airline’s arch rival, Sir Richard soon join the oneworld alliance, was news prepared by Qantas’ signature chef, Neil Perry. Branson, owner of Virgin Atlantic Airways. to the CEOs of the global alliance. One in- Strong, however, was at the heart of the ar- They have at least one experience in common sider said Cathay Pacific Airways boss, David rangements, right down to the flowers and – both of them have spent many, many hours Turnbull, was highly unlikely to accept a direct music for the night. Strong instructed James in the company of Singapore Airlines’ (SIA) competitor like MAS in the alliance, while Morrison, the star musical turn to only play senior management discussing SIA equity in another airline chief promised Orient Aviation for 15 minutes. Keep them wanting more, he their individual airlines. In Eddington’s case, “a very good bottle of red” if MAS ever signed advised. And they did. it involved SIA’s planned 50% purchase of on with oneworld. Ansett, which he then headed. That deal fell COMING TOGETHER: Peter Buecking, at the last hurdle when the other 50% part-ner, CHAMPS: International Air Transport managing partner of the oneworld Central Air New Zealand, blocked the sale. Sir Richard Association (IATA) director general, Pierre Management Team, has one local and two fared better. As sole owner, and therefore with no pesky partners to veto the deal, he sold off 49% of his airline group business to SIA earlier this year. FLYING AGAIN: After a brief, fallow period as an executive director in the sedate London head office of Cathay Pacific Airways parent, John Swire & Sons, Peter Sutch, the former chairman of the Hong Kong carrier and Swire Pacific, is putting his name and experience into an airline, based in Italy.