S U N DAY 1 I SUNDAY I 12 OCTOBER 2008 D A Y

BRINGING YOU THE NEWS FROM THE 14TH WORLD ROUTE DEVELOPMENT FORUM IN r e n r

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BY KERRY EZARD This year’s Routes moves to Asia for the first time, but the location of the event will not be the only thing that is different. This stunning The atmosphere is expected to picture of an be markedly changed from last ornate temple in year’s event in Stockholm as the terminal at ’s new high oil prices and the global sets the economic slowdown continue scene for to blight the industry, Routes’ first as Routes chairman Mike foray into the Howarth explains. Far East. “Obviously things are very different from last year. Last year the industry was still on a roll and lots of were Challenging times for talking about new services,” said Howarth. However, he ex - pects that deals will still be done at this year’s conference Asia- here in Kuala Lumpur as air - lines look towards the future and take advantage of the fail - BY KERRY EZARD Aviation (right). “The IATA chief economist ures of some of their rivals. sia-Pacific airlines are finding negatives are worst in Brian Pearce agrees that “Some carriers will still be there Athemselves hit harder than India, which in August Asia-Pacific airlines are talking about new air services most anticipated by the global saw a 17.3% downturn being hit harder than because some are still expand - economic slowdown. in the number of passen - anticipated, and also ing and some are looking be - As the credit crunch began to gers travelling domesti - points to airlines in yond the next couple of years. bite and the downturn started to cally year-over-year. It’s a and India as being “Quite a few airlines have materialise, many expected the pretty ugly scene there the worst affected. “It gone out of business so there Asia-Pacific to fare better than and the losses are quite was certainly the as - are routes that other airlines other parts of the world because substantial.” sumption [that Asia-Pacific carri - can pick up. Some are routes of the region’s strong economies. China is another country high - ers would fare better than those in that have been flown for 20 However, this no longer appears lighted by Harbison as being par - Europe and North America] but in years and these are easier than to be the case and industry ex - ticularly hard hit. “China again July and August Asia-Pacific air - starting routes from scratch.” perts are warning that airlines in saw very significant downturns in lines suffered more than most in But one thing airlines will be the Asia-Pacific are facing just as August. We’re assuming a fair bit terms of traffic contracting,” said asking for from during tough a time as everyone else, if of this was down to the Olympics Pearce. IATA figures show that the event is help, according to not tougher. and the surrounding security airline traffic in the Asia-Pacific Howarth. “Some airlines are “Looking at the big picture, yes restrictions, overlapped with the shrunk by 3.1% in August while coming to Routes to say to the region is being affected much Szechuan earthquakes,” he said, international traffic carried by airports ‘you’ve got to share faster than most expected,” said adding: “We expect a turn-up in North American airlines grew some of the pain – the route we Peter Harbison, executive chair - September and October, but this man of the Centre for Asia Pacific is by no means certain.” Continued on Page 3 Continued on Page 3

INSIDE THIS ISSUE Distribution sponsored by: Asian liberalisation Page 10 Meet the host (pictured left) Page 18 Air Canada’s Montie Brewer Page 12 AirAsia/MAS competition Page 20 Clash of the Titans Page 14 After hours Page 30 NEWS

Asia-Pacific carriers face fall in traffic Continued from Page 1 Credit crunch impacts on region’s airlines provide benefits you and your community, and we want you to help us’,” he said. “Airlines Continued from Page 1 Tough now see airports as very talking 5.2%. European carriers saw their important to the success of a from Brian route. They see that they can traffic grow by 1.6% in August. Pearce “US and European airlines, get help from airports.” although weak, have been And that help could be bottoming out but Asia-Pacific forthcoming with one as-yet airlines are suffering the most at undisclosed airport planning to the moment,” said Pearce. “The use the event to unveil “a cut effect of lower world trade due to in landing fees that will be backdated to the start of the the credit crunch has been year”, he added. impacting Asia.” This year’s Routes will be And the negative impact of the “about the same size as last Olympics has so far shown no year”, said Howarth, and will sign of lessening, according to once again include the Routes Pearce: “There was some impact Leaders’ Forum that was from the Olympics in China but that it’s going to be a tough time inaugurated in 2007 (see p22). there hasn’t been the expected “It’s going to be a very for Asia-Pacific airlines and there Last year more than 250 senior rebound. I would have expected difficult six to nine months could be some failures. “It’s going industry leaders representing to see some recovery by now but for airlines in the region” to be a very difficult six to nine airlines, airports, governmental it hasn’t happened.” In India, months for airlines in the region. Brian Pearce – authorities, research bodies, Pearce points to a “very sharp The bottom is falling out of the chief economist, IATA banking and investment slowdown in traffic” and market,” he said. “Up to the end houses, aerospace industries predicts airline losses of “well of the year load factors will drop and service providers attended over $1 billion”. But will this gloomy outlook off and it will be very difficult for the Leaders’ Forum in the Harbison lists , translate into airline failures and cash flow, but banks will be re - Swedish capital Stockholm. Airlines and as consolidation in Asia-Pacific, as luctant to extend credit. It’s going Howarth is confident that the airlines in the region that are feel - we have seen in both Europe and to be a very difficult time. I problems affecting the airline ing the pinch. “Carriers with North America? Both Harbison wouldn’t like to predict failures industry will not dampen the premium brands are seeing a and Pearce agree that consolida - but it would be no surprise.” spirit of this year’s event. “The considerable softening of the tion is unlikely because the air - Harbison also believes there is highlight will be that despite all premium market,” he said. line market in the region is less only a very slim chance of con - the problems in the industry, “There’s quite an overhang of mature. “The airline industry in solidation, and warns that further this will be an enjoyable event,” aircraft deliveries starting to come Asia is at a different stage to Eu - liberalisation in the Asia-Pacific he said. “Delegates will like the through and that’s going to rope and North America,” said airline sector could be under location and the host will do a continue to push supply even if Pearce. “Liberalisation took place threat: “The prospect of consoli - good job. The layout is different demand doesn’t keep up, so in Europe and North America dation across borders is some - this year because it’s all going yields will get hurt.” Cathay Pa - years ago, but it’s just starting in where between zero and 1%. to take place in one area, cific surprised the markets by in - Asia. There is not a long-term We’re seeing a bit of a backlash – whereas last year the venue curring a first-half net loss of $71 need for consolidation or a reduc - probably the biggest worry in this was outside the city centre. It million, compared to a net profit tion in capacity as there is in region is that rather than seeing will be more of a campus of $341 million in the same six- North America and Europe.” liberalisation we’re seeing a atmosphere this year.” I month period of 2007. Nevertheless, Pearce points out return to protectionism.” I

I ROUTES PROGRAMME I SUNDAY

PUBLISHED BY AIRLINE BUSINESS IN ASSOCIATION WITH AEROCOMM 09:00-13:00 The 1st Tourism and Air Service DAILY editorial team Photography Visit us on the web: Development Summit. Location: Plenary Geoff Thomas Ian Billinghurst flightglobal.com/ab Theatre, Level 3, West Wing Nick Ionides ©Airline Business 2008 Alan Peaford Advertisement sales 13:30 Registration. Networking village open Mike Miller Robert Hancock Got a story? 15:00-16:30 Inaugural International Air Route Mike Martin Shawn Buck Come and see us in the Development Association Annual Hospitality Lounge 1 General Meeting. Plenary Theatre Design and Printed by overlooking Networking production Times Offset Hall 1 17:30-19:30 Welcome reception (hosted by Amelia Clark Malaysia Airports)

flightglobal.com/ab October 2008 I Airline Business Daily @ Routes I  NEWS I LOW COST CARRIERS

The gospel according to Herb ASIA STILL From pistols to pickles, Kelleher calls the shots THE LAND OF OPPORTUNITY BY MARK PILLING Kelleher sked recently if he’d ever slides “Asia is the last great growth Athought about setting up into opportunity for airlines in the another low-cost airline, South - the world,” said Tony Davis, the west Airlines founder Herb Kelle - limelight chief executive of Tiger her was only half joking when he Airways (pictured), at the re - said: “If the thought entered my cent World Low Cost Airline mind, I’d buy a pistol.” conference. His carrier now And while he acknowledges has operations from bases how tough the market has become in Singapore and Australia lately, he is “astounded” that with others planned in Korea some people talk about the poten - and the . tial disappearance of the low-cost “However, it is very, very industry. “If an economy is suffer - However, running a low-cost Airlines should also be cau - difficult to set up airlines in ing, people have less disposable carrier is “not a vocation for tious on over-expansion. “The air - these markets because of income,” said Kelleher at the re - weaklings”, said Kelleher. The line business is not a sprint – it is the regulations in them,” he cent World Low Cost Airlines industry is “in a fix, in a tight one an obstacle course over a said. “The regulatory hurdles conference in London. “That be - and in a pickle as we say in Amer - marathon distance,” he said. are both a frustration and comes a fertile ground for low- ica”. What airlines need is “stay - “The current state of the race they limit growth, but they cost carriers that charge low fares. ing power” and that absolutely has seen a large hike in fuel prices also stop people coming into “The market may shrink, but it’s basic ingredient: low costs. causing huge increases in an air - the market frivolously.” This shrinking for everybody at the same Southwest has both of these and line’s variable costs. This has means “it could take a long time,” he said. During such periods more with $5.8 billion in cash and caused some legacies to substan - time to see [deregulation] Southwest is in a position to short-term investments on hand, tially reduce capacity – this and the type of market as capitalise just as it did in the 1990- $600 million of instant credit and makes me hopeful as it brings seen in Europe”. 1994 timeframe, following the over 400 completely unencum - opportunities for low-cost carri - In Asia, the penetration of downturn after the first Gulf War. bered Boeing 737s, he explained. ers,” said Kelleher. I low-cost carriers into the market is only 10-15%, which means there are “fantastic opportunities for Clarion call for next-gen single-aisles those operating in the region”, said David Hall, BY MARK PILLING years about such an aircraft in the tremendous savings to be generated chief financial officer of hile there is no magic for - 110-150 seat class, which should by more efficient ATC systems than . The Australian Wmula for success in today’s offer at least a 15-20% improve - we have today,” said Kelleher. carrier has been invited by stressed market, the arrival of a suc - ment in fuel consumption, said Millar believes that many the Vietnamese government cessor to the Airbus A320 and Boe - Kelleher. He believes this aircraft airlines will not survive to reap to establish a joint venture ing 737 will make a big difference. will hit the market around 2013. these benefits. “The facts are that carrier in the country. “I am at the cathedral lighting can - Howard Millar, deputy chief ex - airlines are going to fail this win - “We are still navigating dles, praying for the launch of a ecutive of Ryanair, also wants to see ter,” he said. And consolidation is our way through regulations new fuel-efficient next generation this development but doesn’t see taking hold. “In 10 years time there and government desires,” aircraft,” said Southwest chairman the aircraft available until 2016 or will be three major flag carriers in said Hall. “You need the Herb Kelleher. 2017. Both do, however, agree that Europe: the Germans; Air three Ps to get going there: Southwest has been talking to systems need to be and others; and BA and others. persistence, performance the manufacturers for nearly two radically overhauled. “There are Everyone else will be subsumed.” and patience. We’re patient And, according to Millar, in Eu - because we believe in it.” I Ryanair’s rope there will just be “two low fare Millar carriers of any size – Ryanair and predicts easyJet. These are the only two that a tough have the strength to remain.” winter As far as the price of oil is concerned, Millar believes the in - dustry is moving “into an era of much higher fuel costs and airlines are going to have to get used to it”. Over the next year he sees oil at $70- 90 a barrel, a view Kelleher shares. I

 I Airline Business Daily @ Routes I October 2008 flightglobal.com/ab NEWS

Big ambitions in Abu Dhabi Airports Company sets its sights on world domination

BY KERRY EZARD Midfield bu Dhabi Airports Company is Terminal – Aaiming to expand internation - to open in ally and become one of the top 2011/ three airport owners and operators 2013 in the world. It plans to use its presence at this year’s Routes to promote its activities and bring attention to its flagship airport. “We need to continue to put Abu Dhabi on the map – people must realise that we’ve got a unique product and plan,” said ADAC chief executive Rudy Vercelli. “We have a very ambitious and sively looking at” in the interna - not driven by quantity but by In addition to Abu Dhabi extensive development pro - tional arena, and “we would hope quality of assets. International, ADAC owns and gramme that does not necessarily to have at least one as part of our “We want to be one of the top operates International comprise just what you see today,” portfolio by the end of the year”. three airport owners and operators Airport, close to the border with said Vercelli. “We’re targeting to “We never want to stretch be - in the world,” said Vercelli. , and Al Bateen, a former have our first international inter - yond what’s reasonable. We’re in - Abu Dhabi International is un - military airfield that it plans to vention by the end of the year.” He terested in , North dergoing a $7 billion expansion develop into a dedicated business added that the planned sell-off of Africa and Europe,” said Vercelli, programme, which includes the jet airport. ADAC’s portfolio also one or more of BAA’s London adding that any investment in the construction of a second , a includes an airport on Sir Banyas airports is “something interesting Americas would be made “on a third terminal due to open later island in Abu Dhabi. that we have on our radar”. one-by-one basis”. this year and a 20 million-passen - But ADAC’s ambitions stretch Vercelli says there are “a number “Being the best in terms of serv - ger Midfield Terminal, scheduled well beyond its domestic market. of prospects” that ADAC is “inten - ice is extremely important. We’re to open between 2011 and 2013. I Santiago airport in a cool position

BY DAVID FIELD 2006 and 8.4 million in 2007. the control tower and airspace, but have had some bad times, and after hat an enviable position Lacámara hopes that the nation’s the SCL consortium has the rest. 9/11 we were down for three years. WSantiago airport is in: Its main ministry of public works will fund a The group, in which Vancouver air - But after that, both air cargo and carrier, LAN, is highly stable and new terminal for domestic opera - port is a major investor, committed passenger counts began to rise. As profitable, its home economy is one tions, allowing the international car - to building a new terminal to re - for growth, we shall have to see of the strongest in the region, and it riers to make full use of the airport’s place the early 1960s-vintage facili - what the ministry wants to do,” doesn’t really want very much. larger terminal. He is planning for at ties. It has since been renamed in Lacámara said. Well, maybe some runway widen - least one more air bridge or jet honour of Comodoro Arturo Lacámara added that a major ac - ing, but Alfonso Lacámara, the air - bridge for 2009, while international Merino Benitez, the founder of the complishment of the SCL group port’s chief executive, is fairly carriers such as Air Canada are urg - Chilean air force. was the construction of a cargo ter - content with the way things are. ing planning for larger, longer-term Lacámara explains that in 1997 minal, through which virtually all “When we built the new termi - growth to begin now. the was a small Chilean air cargo moves. The na - nal, we had a design The airport’s mod - shack-like structure in a gravel field tion exports more than 150,000 goal of about 9 or 9.5 ern international ter - near the runway. It was in late De - tonnes annually, much of it fresh million annual pas - minal is the most cember of that year that the Chilean seafood, fruit and wine. It imports sengers, and we will visible evidence of ministry of public works awarded a hi-tech goods. reach that, but not Chile’s embrace of 15-year concession, renewable for Lacámara is proud of the air - yet,” said Lacámara foreign capital and of up to 78 months, to the newly port’s duty-free shopping, which during an interview foreign ownership of formed SCL consortium to operate includes several restaurants, nu - in the Chilean capital. infrastructure. all of the landside area of the capital merous arts and crafts vendors as From August 2007 to The country’s civil city’s airport, including the passen - well as the usual liquor, tobacco, August 2008, the air - aviation administra - ger terminals. At a cost of more than electronics and luxury goods out - port chalked up about tion, the DGAC, owns $300 million, the new 17- ter - lets. LAN, with about half of all in - 9 million passengers, the two 12,000ft minal was opened in 2001. ternational flights at the airport, has up from 7 million in Alfonso Lacámara (3,658m) runways, “Starting with the Asian crisis we two VIP lounges. I

flightglobal.com/ab October 2008 I Airline Business Daily @ Routes I 7 NEWS

Get connected at London Stansted Planning applications for a second runway and terminal are critical in meeting demand

BY MARK PILLING he management team at London TStansted has kicked off a major campaign to attract new interna - tional carriers to the UK airport. “Our central message is that Stansted is a credible London air - port with an excellent catchment area, great connections and huge growth potential,” said Stewart Wingate, managing director of the BAA airport. “We want to get the message Stewart Wingate, MD, across that Stansted is the London Stansted airport airport with available capacity and dispel the perception that it is just capacity. The second terminal and American pulled out as well. an airport for low-cost and “Stansted is a good runway, if approved, will take the But the airport is convinced freighter carriers.” gateway for London with some airport’s capacity to 68 million there is good long-haul market po - The airport is also in the midst of the best prospects seen on passengers annually by 2030, said tential. “We think the airport is a of a planning application for a sec - routes across the North Barton. good gateway for London with ond terminal and second runway, Atlantic and to Asia” At present Stansted is domi - some of the best prospects seen on which will be critical in helping to nated by Ryanair with around routes across the North Atlantic meet the huge forecast demand for the “most connected European air - 64% of its traffic and easyJet with and to Asia,” said Wingate. traffic growth in the London area port in the world” serving 160 des - some 20%. Alongside the growth Stansted recently brought in a new up to 2030. “This will be the first tinations, said Nick Barton, of low-cost players the airport discount scheme to encourage car - new runway in many years to commercial director at Stansted. had been building up its riers to start new long-haul routes. come into operation in the London With its single runway the long-haul base with the arrival of As it seeks new business the area,” said Wingate. strategy for the expanded airport is all-business players MAXjet and airport has invested £8 million Stansted’s single terminal is the to handle 35 million passengers Eos as well as American Airlines. ($14.4 million) in a larger central busiest in Europe, handling 23.7 by 2015. By then the runway But escalating fuel prices caused security search area and £55 million passengers in 2007, and will have reached its maximum MAXjet and Eos to fail while million in a new immigration and international arrivals area to speed passenger flows and give a better MARK PILLING travel experience, said Barton. A major investment in partner - ship with Ryanair saw 80 self- Time for airports to street fight? service kiosks come on line in the week prior to Routes. These will In today’s tough markets airports will once again that airports need to be pre - significantly reduce congestion and have to raise their game to stay competitive and sus - pared for. The advice from our queuing at check-in and could help tain their attraction for airlines, says David Stroud consultancy ASM is to have a push Stansted to handle 40 million (pictured), chief operating officer of the Route Devel - protective sense about keep - passengers a year, said Barton. opment Group, which runs Routes. ing your business and being prepared to negotiate. These initiatives come at a time “There is a bit more street-fighting to be done at Go the extra mile on the deal and open your eyes to of some uncertainty for BAA and the moment and all airports will have to try and be - carriers you would not have previously considered. Stansted. BAA has already said it come more customer-oriented,” he said in an inter - “For many airports the preference is for interna - is seeking a buyer for Gatwick, view prior to this year’s event. tional network carriers but there are other, less anticipating a decision from the How things have changed in the 12 months since fashionable, players out there that might keep you in UK Competition Commission to Routes 2007 in Stockholm. Last year the talk was of the game,” he said. sell the airport. network expansion, with particular excitement around Despite the industry’s woes over fuel prices and Colin Matthews, BAA’s chief Asia-Pacific, India and low-cost airlines. “At this year’s the market downturn there will still be lots of executive, stated: “At Stansted, we event the tone of conversations will be about the ex - opportunities for carriers ready to take advantage. believe that a change in ownership isting services,” said Stroud. “A lot of airlines will be “A lost route is just an opportunity for someone would interfere with the process of asking airports what they are going to do to keep else,” said Stroud. “Look out for the braver airports securing planning approval for a their business. that are not afraid to fight for the business, look at second runway, which remains a “There will be a harder edged set of discussions new carriers and be a bit hungrier.” I key feature of government air transport policy.” I

8 I Airline Business Daily @ Routes I October 2008 flightglobal.com/ab FOCUS I LIBERALISATION

REPORT I NICHOLAS IONIDES OPENING ASIA’S SKY A new Southeast Asian air services liberalisation programme, due to take effect later this year, will shake things up in the region e l d

ears after it was first proposed, dominated by national carriers Malaysia d e M y

a key phase of the Association Airlines and under n n o S

of Southeast Asian Nations’ the terms of an air services agreement / s e r u

(ASEAN) air services liberali - that has not been reviewed since 1980. t a e f x sYation programme finally looks close has also adopted selectively e R to being implemented. The 10-member protectionist air services policies. For in - © regional grouping’s Roadmap for stance, it bars Singapore-based low-cost Integration of the Air Travel Sector carriers from serving its four main cities each. From 1 December things will be ASEAN MEMBER (RIATS) has been a concept under study including the capital Jakarta. Whether radically different, as the Singapore-Kuala COUNTRIES for years. The member nations’ resolve to Indonesia agrees to allow low-cost Lumpur route will be fully liberalised for Brunei implement it in a previously agreed carriers to serve Jakarta from the end of services by airlines from each side. timeframe will ultimately be tested at the this year – as it is supposed to do – will AirAsia will initially have six flights Indonesia end of this year. be one of the more closely watched per day on the route and Tiger will have Laos Under a non-binding agreement aspects of ASEAN’s pledge to go ahead up to five, while Jetstar Asia will have Malaysia adopted by ASEAN members in Novem - with the RIATS scheme. two flights per day on Tuesdays and Myanmar ber 2004, a full liberalisation of air freight The group’s 10 transport ministers are Sundays and three every other day of the Philippines services within the region is due to take next due to meet on an official basis in week. Singapore effect by the end of December. Perhaps Manila in November and at that meeting Rosalynn Tay, managing director of more importantly, however, a full they are meant to adopt formally the Tiger Airways Singapore, says: “This is a Vietnam liberalisation of third and fourth freedom RIATS implementation timetable. huge milestone in Asian low-fare rights for passenger services between aviation.” Jetstar Asia chief executive capital cities is also due to come into FULL LIBERALISATION Chong Phit Lian adds: “It is definitely effect by the end of this year. According to a joint ministerial statement good news. The flight time between A full liberalisation of fifth freedom, issued after their last meeting in Singa - Singapore and KL is short and passen - or beyond, rights for passenger services pore in November 2007, the ministers gers in both cities are very familiar about between capital cities is then due to come “agreed to the signing of the ASEAN the benefits of low-cost carriers.” into effect in December 2010. multilateral agreement on the full liber - At their last meeting in November For example, Singapore and Malaysia alisation of air freight services at the ear - 2007, ASEAN transport ministers also both have highly liberal air services liest possible opportunity, in time for agreed in principle that they would work agreements with most of their interna - implementation by December 2008”. towards expanding RIATS in the hope tional trading partners but between them Whether this target is met or not, the that there will be a single ASEAN they have long maintained one the most talk has already resulted in bilateral aviation market by 2015, similar to that restrictive regimes in Asia. This meant liberalisation initiatives in markets that of the European Union. that until early this year the lucrative were protected for so long. For example, Sceptics doubt this will indeed take Singapore-Kuala Lumpur route was Singapore and Malaysia recently decided place by 2015 as member countries have between themselves that they would “flexibility with regard to the implemen - open up the long-protected Singapore- tation of the proposed timeline”, based Kuala Lumpur route. on Appendix I of the RIATS document. “All ASEAN members Early this year low-cost airlines were But even if a complete liberalisation have different views finally given rights to serve the route, but does not take place by then, long- only in a limited manner. Malaysia’s protected markets are already opening For our Asian towards liberalisation” AirAsia currently operates two daily up and airfares are falling. As Tiger’s Tay Skies blog go to: flights while from Singapore Jetstar Asia says: “The customer is the big winner flightglobal.com and Tiger Airways operate one flight here.” I /blog/asian-skies

10 I Airline Business Daily @ Routes I October 2008 flightglobal.com/ab INTERVIEW

REPORT I DAVID FIELD AIR CANADA MANAGES THROUGH BOEING DELAYS Double whammy hits Canadian carrier with problems for both 777 and 787 programmes

For an airline executive who Association of Machinists strike at Boeing began finds himself held hostage to in early September and two more 777s (of 18 delayed aircraft deliveries, Air more) that were set for delivery by the end of Canada’s Montie Brewer is 2008 will be delayed for an undetermined time, remarkably optimistic. Brewer, who is president almost definitely until well into 2009. and chief executive, wants deliveries of Boeing’s The 787-8 will be delayed by about 30 787 and 777 to modernise the carrier’s fleet. months, with the first deliveries in January 2012. Both models, however, are delayed – the 787 by Brewer says that Air Canada “runs into issues the widely-publicised production difficulties in 2010, when the first aircraft was supposed to and the 777 by the strike at Boeing. show up”. Each 787, for which the airline has But Brewer is fairly confident that Air Canada 37 firm orders and 23 options, should be 30% will weather the delays. “We’ll work our way cheaper on fuel than a Boeing 767-300, he says. through this. We’ll manage as we have before,” Brewer adds that Air Canada would seek some says Brewer. The airline, he says, is well compensation from Boeing for the delays, but is positioned by virtue of its geographic presence: “really very pleased” with the way in which the It is not overly exposed to any one region of the new 777s it has already taken have pushed up world, although in a global downturn it is of unit revenues. course still vulnerable. Air Canada has positioned itself well, with a PREMIUM SEATING leading share in all of its markets. Domestically The new aircraft are fitted with Air Canada’s it has about 57% of all of Canada’s airline “We’ll work our way new premium seating product, which it calls capacity, and internationally it has a market through this. We’ll manage Executive First, and this has already boosted share of about 39%. The domestic Canadian revenues. On the Paris-Montreal route, where marketplace is the source of about 43% of Air as we have before” the new product is available, unit revenues were Canada’s revenues, while it derives about 37% Montie Brewer – up by 7.4% in the second quarter, while on the of its revenues from international travel. president and chief executive, Hong Kong-Toronto run, they rose by 9.5%, Air Canada Brewer says. The Executive First cabin with its CLOSE SECOND ‘pod’ bed is now on all of Air Canada’s 767 and Other airlines collectively come a close second about $800 million to $1 billion above its 2007 777 aircraft. The 777s feature 42 of these seats on international routes, with a cumulative 38% total. So in June, Brewer announced a “painful” and each aircraft brings in between $10 million share. In the domestic market, WestJet is series of job and capacity cuts that will lower the and $13 million in additional annual revenues. second, with about 36% of the nation’s capac - airline’s work rosters by 2,000 and its capacity Brewer says the Executive First cabin is part ity. That leaves transborder flights, a highly by 7% by the end of the year. The biggest cuts of the airline’s North American strategy of mak - fragmented market from which Air Canada are into the hardest hit region, the USA. ing its Toronto and Vancouver hubs into gate - derives just 20% of its revenues. Here it has a Transborder routes take a 13% cut, while ways, not just for Canadian travel but also for 37% market share. But it has a larger interna - domestic routes will be trimmed by 2% and US travel. The plan is to draw flyers from Air tional exposure than other North American international by 7%. Canada’s US cities to these two points, where carriers with about 55% of its capacity While Brewer notes that the international US-bound flyers can enjoy pre-clearance at cus - deployed on international routes. situation is nowhere near as grim as it was toms and immigration and where transfers are By contrast, Continental Airlines, which has during the SARS crisis or the first Gulf War, he relatively simple. one of the largest international systems among is ending flights between Vancouver and Osaka The airline had hoped to make Toronto’s the group, has about 45% on international this month. The airline will also convert a num - Pearson into a global gateway several years routes, while American is down at 35% of its ber of daily overseas services such as Edmon - ago but the airport’s $4.4 billion redevelopment total capacity. When Continental joins the Star ton-London Heathrow and Vancouver-Beijing project created a construction logjam. Pearson Alliance next year, it will begin a relationship from daily to several days a week. had long been a target of the wrath of Brewer’s with Air Canada that will expand Alliance The carrier was counting on the new Boeings predecessor, Robert Milton, who derided it flying into Central and South America. as part of its fleet modernisation. They would for its high costs. Brewer says that even Still, says Brewer, every $1 increase in the allow it to start to retire its Airbus A340s, a though Pearson is “a costly cost of fuel increases the airline’s annual fuel bill model over which the 777-200 has a 15% facility, the benefits are now by $26 million. Its total 2008 fuel bill will be fuel-burn advantage. But the International starting to pay off”. I

12 I Airline Business Daily @ Routes I October 2008 flightglobal.com/ab FOCUS I SE ASIAN HUBS

REPORT I NICHOLAS IONIDES CLASH OF THE TITANS The main airports serving Bangkok, Kuala Lumpur and Singapore are all jostling to be the best hub in Southeast Asia, but all have seen impressive recent growth t e l

irports serving the Thai capital i r F k c Bangkok, the Malaysian capital Kuala i r t a P

Lumpur and the city state of Singa - / s e r u

pore are often portrayed as being in a t a e f x fAight-to-the-death race for hub supremacy in e R

Southeast Asia. But the reality is that all three © have seen passenger and freight demand growing at impressive rates in recent years. Says Bashir Ahmad, managing director of Malaysia Airports: “All the three airports have been growing. I don’t think any one airport has been growing at the expense of another.” Passengers and airlines are benefiting from the perceived hub fight, however. Incentives are being offered to airlines and all have been expanding to cope with increased demand.

I BANGKOK: Bangkok’s airport is the newest of the three main Southeast Asian hub airports, having opened in September 2006 to replace the first of its kind in Asia designed to meet the annually, studies are to begin next year on an city’s old Don Mueang airport. requirements of low-cost airlines. Its main expansion programme. It has had a troubled existence as a result of tenant is locally based AirAsia. The new termi - “We are around 20 million now at the main lengthy delays, construction problems, budget nal was built to handle up to 10 million terminal so we still have some capacity to go,” overruns and political uncertainty in Thailand. passengers annually and 4.5 million passengers says Bashir. “But I would say that about a year It has also seen traffic grow at a slower rate than were expected in the first year of operation. from now we will need to evaluate the need for expected since its opening, as the country’s But this target was exceeded, as AirAsia’s a second satellite.” then-military government decided early in 2007 growth has been quicker than expected. In to re-open the old Don Mueang facility, largely addition to expanding its domestic network as I SINGAPORE: to cater for low-cost airlines. cut back on services, AirAsia Not to be outdone, Singapore’s Don Mueang’s reopening has helped to ease added more international services than has been expanding at a particularly aggressive the burden on Suvarnabhumi, which at just originally anticipated and more recently went pace. Earlier this year it opened T3 – its biggest over two years old is already nearing its initial long-haul with its AirAsia X associate carrier. passenger terminal yet. design capacity. Expansion work on phase two Expansion works that are now underway and T3 and associated works cost S$1.75 billion was to have begun soon after the airport opened, due for completion early next year will increase ($1.2 billion), adding capacity of around 22 but this was badly delayed as a result of the annual handling capacity to 15 million. This million passengers annually, lifting the airport’s country’s political troubles. figure is expected to be reached in around four total to around 70 million. is now trying to move years, however, and discussions are now un - Changi’s first terminal opened in 1981 and forward with expansion works. Its board derway between Malaysia Airports and the gov - this was followed by T2 in 1990, and the origi - recently approved a 77.9 billion baht ($2.3 ernment on an all-new ‘permanent LCC nal masterplan was for a three-terminal airport. billion) project intended to increase annual terminal’ in another part of KLIA that will be The Civil Aviation Authority of Singapore says handling capacity to 60 million passengers able to handle around 25-30 million passengers. it strives to ensure that growth in Changi’s from 45 million. Phase two works are to Meanwhile, at the main terminal, which has handling capacity comes “ahead of growth in include a new ‘midfield’ terminal and third a design capacity of 25 million passengers air traffic”. runway. Final government approval is now Work is currently underway on a major up - being sought. grade of the 27-year-old T1, which is expected “All the three airports have been to be completed in the third quarter of 2011. I KUALA LUMPUR: growing. I don’t think any one In addition, a ‘budget terminal’ that opened In Malaysia, the flagship Kuala Lumpur airport has been growing at the just after KLIA’s low-cost terminal in March International Airport (KLIA) is also undergoing expense of another” 2006 is also being expanded. Works will improvement works, with a major expansion of continue through early 2009, increasing its low-cost terminal currently underway. Bashir Ahmad – handling capacity to 7 million passengers managing director, The terminal opened in March 2006 as the Malaysia Airports annually from the current 2.7 million. I

1 I Airline Business Daily @ Routes I October 2008 flightglobal.com/ab MEET THE HOSTS

REPORT I NICHOLAS IONIDES ONWARDS AND UPWARDS

The host of this year’s Routes, Malaysia Airports, is looking forward to continued growth and international expansion

alaysia Airports is moving with expansion plans for key airports. forward with expansion At KLIA, for example, its low-cost “It has been very plans for key airports in its airline terminal is currently undergoing portfolio, as it expects a major expansion and there are plans positive for us, going Mhealthy growth in travel demand in the for an all-new, much larger budget into overseas ventures” years ahead despite the current market terminal to replace it eventually. In Bashir Ahmad – weakness. It is also continuing to look – addition, studies for a second satellite at managing director, albeit conservatively – at expanding its the main terminal are expected to begin Malaysia Airports international investment portfolio. in the coming years. Managing director Bashir Ahmad said Expansion work has also been under - Under Bashir’s watch since he joined in an interview with Airline Business way at many of its other airports. At as managing director in June 2003, Daily : “We are still positive in the long Kuching and Labuan in East Malaysia, Malaysia Airports has been expanding term. We will still continue with our upgrade works have been completed, its international reach through invest - plans.” Malaysia Airports, the official while at Kota Kinabalu work is well ments in airport projects in other host of this year’s Routes event in Kuala underway on a major expansion. countries. In India it partnered with local Lumpur, manages 39 airports within In peninsular Malaysia, infrastructure and energy Malaysia through which it has seen airport is being upgraded while work has GMR on the all-new Hyderabad Interna - healthy growth in passenger and cargo taken place on several others such as at tional Airport, which opened earlier demand in recent years. Terengganu and . this year. For example, passenger throughput Together with GMR and other increased 8.1% overall in the first half of BOOSTING TRAFFIC partners it also successfully won the bid this year and at the flagship Kuala Malaysia Airports’ main focus in recent in 2006 for the privatisation of Delhi Lumpur International Airport (KLIA) years has been on boosting traffic airport. alone the increase was 7.4%, to 13.4 through its flagship KLIA. Bashir says In , it partnered with GMR and million passengers. Freight throughput the operator has been successful in Turkey’s Limak and earlier this year took also increased, by 5.3% overall at the 39 attracting new customers, in part over the operation of Istanbul’s airports and by 17.8% at KLIA. through an incentives programme. He secondary Sabiha Gokcen International This translated into increased profits says a new package of incentives is being Airport, which is now being expanded. for the publicly traded, government- looked at now. And in Kazakhstan, Malaysia Airports is controlled airport operator, with first- The current package offers free now managing Astana airport, although half pre-tax earnings rising 20% and net landing and parking for the first three it has no equity in it. earnings up 24%, on a 16% growth in years for new airlines, or for existing Bashir says the international invest - revenue. airlines increasing services. Marketing ments have been positive for Malaysia Bashir says there are concerns about support is also provided. “I would say Airports and it will continue to look at airlines cutting capacity amid high fuel that over the last three years we have had other such opportunities, although he prices and weakening demand. For at least 10 new airlines. We have about stresses that this will be on a conserva - example, it has already seen Australia’s 54 or 55 airlines now, including cargo,” For more airline tive basis. “It has been very positive for Jetstar withdraw services and Malaysia he says. “It has been quite successful, but news go to: us, going into overseas ventures. We are Airlines reduce services. But he sees any we believe it is about time that we may flightglobal.com/ quite happy with the four that we have downturn as temporary and is continuing need to enhance that a little bit.” airlines now,” he says. I

18 I Airline Business Daily @ Routes I October 2008 flightglobal.com/ab FOCUS I AIRASIA V MALAYSIA AIRLINES

Left: AirAsia’s Fernandes, and MAS’ Idris, below

REPORT I NICHOLAS IONIDES AirAsia and Malaysia Airlines have been embroiled in bitter rivalry for some time, and it shows no sign of easing up MU D- SLINGING MATCH

o say there is no love lost operation of the subsidised services OCTOBER 2008 v OCTOBER 2007 between the heads of low-cost under a new unit called MASWings, carrier AirAsia and national car - but not before complaining publicly Kuala Lumpur – domestic ASK change rier Malaysia Airlines (MAS) is that FAX had left some of the aircraft it Airline Oct 2008 Oct 2007 pTrobably an understatement. It is almost was going to be taking over in a terrible AirAsia 11,801,965 106,066,72 8.2% ironic, however, as AirAsia’s Tony state, which FAX denied. Malaysia Airlines 90,909,129 85,968,128 5.7% Fernandes and MAS’ Idris Jala have FAX then announced it was moving much in common, both being affable into long-haul international operations Kuala Lumpur – South-East Asia ASK change guys with a shared passion for music. to markets served by MAS, using Air - Airline Oct 2008 Oct 2007 Were it not for their corporate rivalry bus A330s under the AirAsia X name. AirAsia 196,692,59 178,0,621 10.% they could probably make good friends. AirAsia also won the next round, Malaysia Airlines 169,215,55 167,019,552 1.% The rivalry became evident not long when it secured long sought-after rights after Idris was appointed to head to operate two daily flights on the Kuala Lumpur – World ASK change up then-troubled MAS at the end of lucrative Kuala Lumpur-Singapore Airline Oct 2008 Oct 2007 2005. A veteran of Shell with no airline route. MAS had been fighting particu - Malaysia Airlines 89,67,819 92,611,722 -8.0% experience, Idris focused immediately larly hard to keep AirAsia off this route. AirAsia 256,817,90 20,606,721 25.5% on making badly-needed cost cuts to the The rivalry has continued through SOURCE: INNOVATA business. In so doing, he proved he much of this year. Early in May, MAS Data is based on schedules for 20-26 October 2008 against 15-21 October 2007 had solid government support for launched a major domestic fares necessary change and this took Fernan - promotion and on the first day its blog to get under MAS’ skin. One des by surprise. advertisements looked virtually identi - recent posting was about a journey he cal to AirAsia’s, using the same red took on a Singapore Airlines Airbus CONTROVERSIAL colours and same fonts. As Idris told A380. Raving about the flight, he posed Idris and Fernandes did shake hands journalists at IATA’s annual general the question: “Why are they better than on a deal in 2006, when MAS meeting in Istanbul a few weeks after us?”, and wrote that SIA “don’t cut withdrew from the majority of its the promotion was launched, Fernan - corners, ie they are not a five-star value loss-making domestic routes and des “freaked out” when he saw them. airline, they are a five-star premium handed some of them over to AirAsia Fernandes indeed expressed public airline”. This was a clear attack on under a pact sanctioned by the govern - bitterness, complaining that there was MAS’s goal of being a so-called “five- ment. As part of the deal, subsidised no “level playing field” between star value carrier”, meaning a premium turboprop services in rural East government-owned MAS and pri - airline with the cost base of a low-cost Malaysia were taken over by AirAsia, vately-owned AirAsia. carrier to enable it to offer low fares. which sub-contracted them to a new “Why are they only concentrating on airline called Fly Asian Xpress (FAX) our routes?” Fernandes asked local WHERE NEXT? that was owned by Fernandes and media. “MAS is turning into a low-cost Fernandes went on to write that “some some of his business associates. carrier instead of being the premium airlines nearer to me are trying to be an FAX launched on 1 August 2006 but airline it was set up to be. This fighting LCC and have completely lost what things got controversial when MAS is ridiculous. We should be competing their brand stands for”. Where will the was permitted by the government to set against foreign airlines.” rivalry between MAS and AirAsia turn up a new turboprop operation of its The bitter rivalry continued, to next? Earlier this year Idris told own in peninsular Malaysia called however. Idris later wrote to Fernandes Airline Business he was hopeful the Firefly. AirAsia was not amused and informing him that steep discounts he two airlines could eventually “compete just over six months after FAX was receiving for travel on MAS would and collaborate at the same time”. launched, it asked the government to no longer be offered to him, suggesting Whether the two airlines will ever To read our CEO give back the operation of East it was due to “your various negative find that balance is anyone’s guess, but interviews go to: Malaysia routes to MAS. statements about Malaysia Airlines”. for now it does not seem like it will be flightglobal.com/ MAS ultimately did take back the Fernandes is now using his personal any time soon. I CEOs

20 I Airline Business Daily @ Routes I October 2008 flightglobal.com/ab AGENDA

2008 LEADERS’ FORUM This year’s Routes Leaders’ Forum will take place on Monday 1 October and will give delegates the opportunity to hear from a variety of distinguished speakers on a range of topics affecting the airline industry. SCHEDULE 11:00-12:00 10:00 WELCOME and conference opening address Chair of the Routes Leaders’ Forum: I Professor Rigas Doganis, Doganis & Associates, non-executive director – Hyderabad International Airport and easyJet 10:00-11:00 SESSION 1: Living with high oil prices Chair: Professor Rigas Doganis Panellists: I Idris Jala, chief executive Malaysia Airlines I Andrew Herdman, director general, Association of Asia Pacific Airlines Beyond Open Skies I Vijay Poonoosamy, vice-president international affairs, I Hans Mitterlechner, director, Macquarie chief executive Willie Walsh I Justin Symonds, global head of transportation and will outline his hopes for the second phase logistics sector advisory, ABN Amro of the EU-US Open Skies process, and envis - age how different the industry may look in SESSION 2: Beyond Open Skies 11:00-12:00 the second decade of the 21st century. Chair: Professor Rigas Doganis Panellists: I Bashir Ahmad, managing director, Malaysia Airports 14:30-15:30 I John Byerly, deputy assistant secretary for transportation affairs, US Department of State I Paul Gretch, director of the office of international aviation, US Department of Transportation I Olivier Onidi, directorate general for energy and transport, European Commission I Willie Walsh, chief executive, British Airways 12:00-12:30 FORUM FOCUS – China Beijing Capital Airport embraces the world with an open mind I Zhang Zhizhong, president, Capital Airports Holding Company The Climate Crunch 12:30-14:30 LUNCH I Networking village, Routes Association of Latin American Airlines 14:30-15:30 SESSION 3: The Climate crunch. director general Alex de Gunten will talk Will stopping flying really change the planet? about the steps taken so far by the airline Guest chair: Aaron Heslehurst, BBC News industry to improve its environmental Panellists: record, and how the industry can further I Alex de Gunten, executive director, Association of Latin American Airlines reduce its carbon footprint going forward. I Olivier Jankovic, director general, ACI Europe I Kerstin Lindberg Goransson, managing director, division Stockholm, Stockholm Arlanda Airport 15:30-16:30 I Callum Thomas, Professor of sustainable aviation and chair of sustainable aviation at the Centre for Air Transport and the Environment, Manchester Metropolitan University 15:30-16:30 SESSION 4: The next big thing Chair: Professor Rigas Doganis Panellists: I , chief executive, AirAsia I Peter de Jong, president, Pacific Asia Travel Association I Luis Sanchez Salmeron, deputy chief executive, BAA I Ad Rutten, executive vice-president and chief operations officer, The Next Big Thing Schiphol Group AirAsia X chief executive Azran Osman-Rani I Azran Osman-Rani, chief executive, AirAsia X will be giving an update on the new Asian 16:30 Chairman’s closing remarks long-haul carrier.

22 I Airline Business Daily @ Routes I October 2008 flightglobal.com/ab WHO’S HERE...

PARTICIPATING AIRLINES

AIRLINES D) Delta Air Lines O) Olympic Airlines Drukair (Royal Bhutan LOW COST NATIONAL CARRIERS Airlines) P) International A) Adria Airways JETSTAR ASIA E) Egyptair Airlines Aer Lingus Jetstar Asia was one of several Russian Airlines low-cost carriers to recently Aerolineas Argentinas Q) Airways announce that it would take Etihad Airways advantage of the liberalised air Aeromexico R) Afriqiyah Airways F) services agreement between Royal Air Maroc Singapore and Malaysia and G) Air Baltic Georgian National Airlines boost flights between the two Air Canada S) countries. SAS International H) Saudi Arabian Airlines AirAsia JetBlue Airways Long-haul Hawaiian Airlines Air France Medium-haul Shaheen Air International AirAsia X Jetstar Airways I) Iberia Long-haul Shanghai Airlines Air Lionair Air Malta Iberia Short-haul Singapore Airlines Air India Express Lionair (Australia) Air Moldova Icelandair SriLankan Airlines Swiss International Air Lines Air Tahiti Nui J) Belle Air Norwegian Air Shuttle Air Transat Syrian Airlines bmibaby Sama K) Alitalia T) TAM Linhas Aereas Air SkyEurope Airlines KLM Cargo TAM Mercosur Centralwings Southwest Airlines KLM Royal Dutch Airlines American Airlines Tarom Click Mexicana Spicejet (Europe) Armavia Air Company Clickair Sterling Airlines KLM Royal Dutch Airlines Atlantic Airways Transaero Airlines Dalmatian.hr Ted (Long-haul) Group Easyjet Thai AirAsia Eurolot Tiger Airways B) BH Airlines U) Ukraine International L) LAC/Air Congo FireFly TUIfly bmi Airlines LAN Airlines Flyniki VolareWeb British Airways Long-haul United Airlines LOT Polish Airlines Indonesia AirAsia Vueling Airlines British Airways Short-haul US Airways LTU International Airways Jet2.com WizzAir Bulgaria Air M) C) Cathay Pacific V) Malaysia Airlines Airways Omni Air International Intercity Air Malev Hungarian Airlines Virgin Nigeria Privatair Jade Cargo International Martinair Holland RAF Avia Airlines LAN Cargo (Passenger) Continental Airlines CHARTERS Scandjet Malaysia Airlines Cargo Conviasa MAT- Thomsonfly.com Cargo Air Finland COPA Airlines Mexicana Travel Service Airlines Ruslan International Astraeus Croatia Airlines N) Tuifly Germany Transmile Air Services Belair CSA Czech Airlines White Airways UPS Eurofly SPA Zenith Airways Volga Dnepr UK Ltd First Choice Airways Free Bird Airlines CARGO TOUR OPERATORS Lufthansa has been very Gadair European Airlines Air Atlanta Icelandic First Choice Holidays active on the European Hong Kong Express Airways Air Bridge Cargo Jet2 Holidays.com consolidation stage, and Indonesia Air Transoprt Astral Aviation Kenny Tours recently agreed to Jetairfly Emirates Sky Cargo Nolitours purchase a 45% stake in Livingston S.P.A Ethiopian Airlines Cargo TUI AG Brussels Airlines with an LTE International Airways Etihad Crystal Cargo TUI UK option to acquire the Meridiana Expo Aviation Vacances Transat remainder of the carrier. Netjets Europe Nouvelair Tunisie FedEx Express Holidays

REGIONAL CARRIERS BABOO Aegean Airlines bmi Regional Kingfisher Airlines Seair Swiss regional AeroRepública Fly4 Airlines LAN Argentina carrier Baboo Air Canada Jazz Iberia Regional LAN Chile Airlines recently re-branded Air One Air Nostrum LAN Ecuador Siem Reap Airways from Flybaboo and Arik Air Ivoirienne de LAN Express Silkair announced plans to Austrian Arrows Transportes LAN Peru Sol Lineas Aereas expand its capacity Aeriens (ITA) Love Air VietJetAir and serve new Berjaya Air Jet Air PB Air Xiamen Airlines routes. Blue 1 KD Avia PTL Airlines

2 I Airline Business Daily @ Routes I October 2008 flightglobal.com/ab DATA BURST

PLANNED GROWTH I FOR ASIAN CARRIERS

PLANNED CAPACITY GROWTH FOR TOP 10 ASIAN CARRIERS ON ASIA TO ASIA ROUTES

AIRLINE WEEKLY CAPACITY WEEKLY FREQUENCIES WEEKLY SEATS OFFERED ASK MARKET SHARE ASK million change total change thousands change China Southern Airlines 1,99 -6.6% 8,28 -726 1, -6.9% 8.5% China Eastern Airlines 1,190 -0.9% 7,15 -25 1,089 -2.0% 6.7% All Nippon Airways 1,185 -1.7% 6,880 -62 1,5 -.1% 6.7% Japan Airlines 1,178 .6% 5,196 +15 1,20 2.7% 6.6% Air China 1,177 7.6% 5,68 +11 95 7.6% 6.6% Singapore Airlines 785 -2.1% 1,020 0 07 -0.% .% Thai Airways 6 -2.6% 1,69 -5 92 0.2% .6% Cathay Pacific Airways 599 9.% 907 +29 10 .6% .% Korean Air Lines 561 2.% 2,277 -55 57 0.6% .2% Malaysia Airlines 65 -1.2% 2,51 +97 50 0.9% 2.6%

PLANNED CAPACITY GROWTH FOR TOP 10 ASIAN CARRIERS ON ASIA TO EUROPE ROUTES

AIRLINE WEEKLY CAPACITY WEEKLY FREQUENCIES WEEKLY SEATS OFFERED ASK MARKET SHARE ASK million change total change thousands change Singapore Airlines 16 2.% 9 +16 0 2.1% 15.7% Thai Airways 267 2.% 81 +1 0 2.6% 1.% Cathay Pacific Airways 190 0.% 62 0 20 0.6% 9.5% Japan Airlines 176 -2.1% 55 +1 19 -1.6% 8.8% Air China 160 -1.0% 6 -1 20 -0.9% 8.0% Korean Air Lines 129 -7.5% 6 - 15 -7.5% 6.% Malaysia Airlines 12 -1.6% 7 -8 12 -15.1% 6.2% Jet Airways (India) 9 28.8% 9 +10 1 27.9% .7% Air India 8 -16.5% 8 -6 12 -17.7% .2% Pakistan International Airlines 6 .8% 5 + 11 .% .2%

PLANNED CAPACITY GROWTH FOR TOP 10 ASIAN CARRIERS ON ASIA TO N AMERICA ROUTES

AIRLINE WEEKLY CAPACITY WEEKLY FREQUENCIES WEEKLY SEATS OFFERED ASK MARKET SHARE ASK million change total change thousands change Cathay Pacific Airways 05 9.% 72 +16 26 5.% 19.0% Korean Air Lines 267 -5.9% 86 -2 28 -5.% 16.6% Japan Airlines 129 -.8% 2 0 1 -5.2% 8.0% EVA Air 122 -5.0% 6 - 12 -5.6% 7.6% Singapore Airlines 11 -15.9% 8 -7 11 -15.7% 7.1% All Nippon Airways 11 0.0% 9 0 1 0.0% 7.1% Japan Airlines 110 0.5% 6 0 21 0.% 6.9% 98 6.% 0 -1 12 2.0% 6.1% Philippine Airlines 92 0.6% 28 -1 9 0.5% 5.7% Air China 88 -11.% 27 -2 9 -12.6% 5.5%

Source: INNOVATA Data compiled by Flight Insight based on Innovata schedules for 20-26 October

26 I Airline Business Daily @ Routes I October 2008 flightglobal.com/ab NEWS

ANA and JAL share bad dreams Japanese wake-up call for strike-hit Boeing BY LEITHEN FRANCIS still expecting our first aircraft to protracted strike at Boeing’s be delivered in October 2009”. Aaircraft assembly plant Boeing’s 787 Dreamliner proj - means that both All Nippon Air - ect is now way behind schedule ways (ANA) and Japan Airlines and the aircraft still has to make (JAL) are bracing themselves for its much-delayed maiden flight, possible further delays to Boeing let alone begin the certification 787 deliveries, according to Air process. ANA and JAL Transport Intelligence (ATI). ANA, meanwhile, was sup - share pain of Boeing strike “We are certainly preparing posed to receive its first 787 next nightmare ourselves for the prospect of a August but it too is concerned further delay although there has that the strike might lead to a been no official word from Boe - further delay in 787 deliveries. 2004 it announced it would re - journalists there that: “Frankly, ing yet,” said JAL. “The impact “We’ve had no information from ceive the first in May 2008. JAL we do not know when the strike the strike may have on the cur - Boeing but we are still working placed its 787 order in 2005 and will end.” He added: “As soon rent 787 schedule is certainly of on the basis of an August deliv - was originally slated to receive as the strike does end, our oper - great concern” but “Boeing has ery,” said ANA. its first 787 some time in the sec - ations will normalise” and then not informed us of any update to ANA's August delivery date ond or third quarter of 2008. “we will be able to reassess our the delivery schedule of our first already represents a delay be - A Boeing spokesman was in production, deliveries and pro - 787 aircraft at present. We are cause when it ordered 787s in Tokyo a few days ago and told gramme schedule for the 787”. I

28 I Airline Business Daily @ Routes I October 2008 flightglobal.com/ab AFTER HOURS

Left: Dizzy heights – the Petronas Towers in Kuala Lumpur City Centre THINGS TO DO IN KL NIGHT LIFE Though Malaysia is a A TOWERING Muslim country it does have great nightlife. The main areas you should head SPECTACLE to for a good choice of cafés, bars, lounges and Kuala Lumpur (KL) appeared on the map in the nightclubs are the Golden mid-1800s and is the youngest capital in Triangle and Bangsar Baru. Southeast Asia. Its architecture reflects this with VILLAGE BAR a mixture of old colonial-style buildings and 181 Jalan Bukit Bintang, modern skyscrapers.There is plenty to do and Starhill Gallery see in KL, so here is a handful of ideas This upscale basement bar has dangling lanterns and ISLAMIC ARTS MUSEUM stacked glass bottles. There Jalan Lembah Perdana PETRONAS TOWERS is an international wine/beer www.iamm.org.my You can’t really miss these babies located in Kuala Lumpur City list and they are noted for Open: Daily 10am-6pm Centre (KLCC). They are the tallest twin buildings in the world at a their perfectly prepared Large museum holding one of height of 1,500 feet with 88 storeys. They opened in 1998 and are cocktails. the largest collections of the headquarters of the national oil and gas company, Petronas, LUNA Islamic art in the world that but also house other companies. Menara PanGlobal, includes beautiful textiles, The glass Skybridge on the 41st floor connects the towers and Jlln Punchak ¥22 7777 carpets, calligraphy-inscribed has wonderful views. It is the highest floor that members of the Sophisticated bar surrounding pottery, Islamic jewellery, and public can travel to. For tickets, which are limited, and to avoid a swimming pool. Luna is a illustrated medieval copies of queues it is best to go early (Open 9am-1pm and 2.30pm-4.45pm great place to come for a the Koran. There is a stunning closed on Mondays). fabulous view of the city. It’s reconstruction of an ornate The towers are built on a huge development complex which busy on Friday and Saturday Ottoman room, as well as includes the Suria KLCC shopping mall just at the foot of the nights, when there is also a regular exhibitions. This towers, tranquil KLCC Park, Aquaria KLCC, where you can see sand fixed cover charge. month’s is: Beyond Oriental - tiger sharks in a huge glass tunnel, and Galeri Petronas which has FINNEGAN’S ism: How the West was Won art and photography exhibitions. 51 Jlln Sultan Ismail over by Islamic Art. If you’re Tel: 215 190 51 hungry, there is a great Have great ‘craic’ at this Irish Lebanese restaurant too. beautiful shades of pink and LAKE TITIWANGSA bar. There is a good food cream brick, is set in a grove Stretch your legs and take in menu, Guinness and beer on MASJID JAMEK of palm trees and is set on the the city skyline from this pretty tap, and live sports coverage. Jalan Tun Terak banks of the Klang and lake. If you’re feeling energetic There is also a Finnegan’s in The British architect AB Gombak rivers which provide a you can hire rowing boats, Bangsar Baru (6 Jalan Telawi Hubbock sought inspiration tranquil setting for prayer and pedal boats or canoes. Or you Lima). from Mogul mosques in India contemplation. Visitors are can relax in the park that to build this mosque, in 1909. welcome except during prayer surrounds the lake, which is a TIFFIN BAY/TIFF’S JAZZ The mosque, which has times. popular spot with locals. LOUNGE th floor, Starhill Gallery, 181 Jlln Bukit Bintang ¥2782 870 USEFUL NUMBERS I INFO Crazy décor but it’s a great place to chill out during the ¥Country Code : Health Risks: Kuala present in Sabah, Sarawak Airport Information Malaysia – +60 Lumpur is generally safe and some remote areas in Kuala Lumpur day for tea. In the evening it Area code:  from most sanitation- peninsular Malaysia. Use International Airport turns in to a jazz bar with live Emergency Services related diseases. However, insect repellent when ¥8777 8888 bands playing from 9pm. Police/Ambulance – 999 it is still wise to take extra visiting the countryside. www.klia.com.my Fire and Rescue – 99 precautions. Make sure TELAWI STREET BISTRO Hospital Kuala Lumpur meat is cooked very well, Tourist Information Car Hire Jalan Telawi 1 & Jalan Telawi  Jln avoid local dairy products Malaysian Tourist Centre Avis and peel fresh fruit/raw 109 Jln Ampang ¥228-168 2615 5555 www.avis.com.my ¥ vegetables. Tap water in One of Bangsar Baru’s most www.hkl.gov.my ¥216 929 ¥21 87 the cities is considered www.mtc.gov.my Hertz popular dining venues (try the Pharmacies are easily safe, but it is wise to buy Tourism Malaysia www.hertz.com.my lamb shank/thin crust pizzas) located in KL, many in the bottled water especially if shopping malls. The most www.tourismmalaysia.gov.my and dancing – with contempo - you are staying on after the KL Sentral common one is called show and plan to travel to rary DJ tunes and great 227 606 Guardian. rural areas. Malaria is ¥ cocktails.

0 I Airline Business Daily @ Routes I October 2008 flightglobal.com/ab