Vol. 27 No. 9 November 2020 orientaviation.com

EASE THE PAI N

Remove travel rules between -Pacific’s low-risk countries requests airline lobby boss

Razzzle dazzle star China billionaire plans Industry outsiders power of ’s launch of Hong Kong buy into bankrupt newest airline mid-market carrier Jet Airways TOMORROW’S MAINTENANCE SOLUTIONS. AVAILABLE TO YOU TODAY.

ADVANCING THE PERFORMANCE, RELIABILITY AND HEALTH OF YOUR ENGINES.

Pratt & Whitney’s complete EngineWise® service platform combines predictive technologies, tailored solutions and shared expertise to deliver unprecedented levels of support to your fleet. Reducing your costs and providing greater insights – it’s how we help you operate your engines worry-free.

EXPLORE OUR DIGITAL SOLUTIONS AT ENGINEWISE.COM

PW_AfterMarket_Maintenance_OrientAviation.indd 1 10/1/20 9:42 AM

Client: Pratt & Whitney - Aftermarket Ad Title: Tomorrow’s Maintenance Filepath: /Volumes/GoogleDrive/Shared drives/Pratt and Whitney 2020/Aftermarket/_Aftermarket Ads/EngineWise_ Tomorrow_Advance_Innovative/4c ads/PW_AfterMarket_Maintenance_OrientAviation.indd Publication: Orient Aviation - November Trim: 202 x 273 mm • Bleed: 212 x 283 mm • Live: 182 x 253 mm CONTENTS Volume 27, Issue 9

MAIN STORY

14 EASE

ORIENT AVIATION MEDIA GROUP 17/F Hang Wai Commercial Building, THE PAIN 231-233 Queen’s Road East, Overcautious governments Wanchai, Hong Kong Editorial (852) 2865 1013 stifling industry recovery says E-mail: [email protected] region’s airline association Website: www.orientaviation.com

Publisher & Editor-in-Chief Christine McGee E-mail: [email protected]

Associate Editor & Chief Correspondent Tom Ballantyne Tel: (612) 9638 6895 Fax: (612) 9684 2776 E-mail: [email protected]

North Asia Correspondent Geoffrey Tudor COMMENT 17 Toil and trouble of travel bubbles Tel: (813) 3373 8368 5 Cash crisis accelerates at Asia-Pacific airlines 18 Airline sector wallflower new belle of aviation E-mail: [email protected] ball Photographers ADDENDUM Rob Finlayson, Graham Uden, 6 Hong Kong aviation veteran advisor to proposed Ryan Peters Greater Bay Airlines

Chief Designer 6 New investors take charge at India’s Jet Airways Chan Ping Kwan

Printing Printing Station(2008)

19 Industry shifting to post-COVID-19 survival ADMINISTRATION strategies as forward bookings increase 20 SpiceJet’s foray into paying off General Manager Shirley Ho TECHNOLOGY E-mail: [email protected] 7 What worked in 2019 may not work in 2021 says 21 Hurdles ahead to achieve hydrogen powered Qantas Group boss aircraft ADVERTISING NEWS BACKGROUNDERS INDUSTRY ADDENDUM Asia-Pacific, Europe & Middle East 8 Passenger rebound no antidote to Mainland 22 ’s Mitsubishi conglomerate retreats from Defne Alpay Tel: +44 7712 829859 airline losses SpaceJet program despite the boost of buying E-mail: [email protected] 9 More staff cuts on the horizon at several Asia- Bombardier’s CSeries business Pacific carriers 22 All Nippon Airways and sustainable aviation fuel The Americas / Canada 10 Star power of Taiwan’s new premium carrier manufacturer, Neste, contract to enduring supply Barnes Media Associates deal Ray Barnes Tel: +1 434 770 4108 Fax: +1 434 927 5101 E-mail: [email protected] [email protected]

Download our 2020 media planner at: orientaviation.com/advertising

Follow us on Twitter @orientaviation 13 Aircraft cabin safer than most indoor public 22 Sabre and Google create Artificial Intelligence spaces says OEM study travel platform

NOVEMBER 2020 / ORIENT AVIATION / 3 Looking for comprehensive engine & aircraft solutions? JUST CONNECT THE DOTS.

WERC WAMS (US & UK) (UK & SPAIN)

WILLIS PLATFORM ™ CAPABILITIES INCLUDE: • Liquidity options • Consignment Programs (including short- and • Aircraft & Engine Teardown long-term asset financing) • Aircraft Parking & Storage • Engine and Aircraft • Asset Evaluations Leasing & Trading • End of Life Service Programs • Lease Management • Part 145 Engine Maintenance • ConstantAccess™ (Willis Engine Repair Center • ConstantThrust™ [WERC US & WERC UK]) • Consultancy • Part 145 Aircraft Maintenance • CAMO (Willis Aircraft Maintenance • Technical Records & Storage – [WAMS]) • Material Support

[email protected] | +1 561.349.8950 | www.willislease.com COMMENT

Cash crisis accelerates at region’s airlines

For the second consecutive year, the Association of Asia re-open and restrictive quarantine measures be relaxed. Pacific Airlines (AAPA) has had to drastically rearrange AAPA director general, Subhas Menon, points out the its annual gathering, the Assembly of Presidents of its region has the lowest rate of infection per 100,000 of the member airlines. global population, yet it has the highest number of border Last year months of anti-government protests in closures. Asia-Pacific governments are over-reacting and Hong Kong, which had frequently paralysed the Special should be less risk averse, he told Orient Aviation in our Administrative Region (HKSAR), prompted a move to a cover story this month. members-only gathering in . This year, not A strongly worded motion calling on governments to surprisingly, travel restrictions and quarantine measures loosen restrictions will certainly emerge from the Assembly put paid to Japan Airlines hosting the Assembly in . especially as international flying is essential to the recovery Instead, for the first time, airline leaders will meet in an of most of the region’s airlines. online, members-only gathering. In the meantime, staying in business, and that must A media briefing, also online, will follow a few days later. involve more support from governments, remains the The AAPA’s airline leaders will have plenty to discuss at the biggest challenge for Asia-Pacific airlines. It is a perilous mid-month meeting as they debate options for survival beyond course to navigate made clear by the International Air COVID-19. No doubt the impact of the pandemic will top the Association’s warning that the world’s airlines, agenda, particularly as the region’s governments have largely on average, have only eight months of cash left to fund been unresponsive to aviation’s urgent need for borders to their operations. ■

TOM BALLANTYNE Associate editor and chief correspondent Orient Aviation Media Group

A trusted source of Asia-Pacific commercial aviation news and analysis

ORIENT AVIATION ORIENT AVIATION CHINA

NOVEMBER 2020 / ORIENT AVIATION / 5 ADDENDUM AIRLINES AIRPORTS PEOPLE

Hong Kong’s new airline on track for third quarter 2021 launch

Plans for the Asia-Pacific’s region was born long before the but the end result is all those newest airline are well crisis. resources, which are extremely underway, but one thing “The first time we broached precious, valuable and difficult to Greater Bay Airlines will not the idea of another airline in come by, all of sudden are right be doing is competing with Hong Kong was at the beginning there to be picked. This project is the incumbent Cathay Pacific of last year. That was well before going to help some people who Group said one of the carrier’s the riots in Hong Kong and have been sacrificed by current senior advisors. Associate COVID happened,” Hui said. “It circumstances. Coincidental, but editor and chief correspondent, is a very long term vision being obviously very helpful.” Tom Ballantyne reports. undertaken.” Hui is the right-hand man and Hong Kong aviation veteran, In the end, the timing could principal advisor to GBA’s owner, Stanley Hui, wants to make it very hardly have been better. “It just Bill Wong, a billionaire who made heavily involved in property clear the launch of Greater Bay happened that when we started his initial fortune in southern development, but its principal Airlines (GBA), planned for the the ball rolling it was at the time Chinese property. is no stranger to aviation. He set third quarter of next year, is not aviation was in an unprecedented Wong, at 62, is pumping up and owns Shenzhen-based an attempt to grab opportunity crisis. As a result, resources were US$258 million into the new Donghai Airlines, which has been in the middle of a pandemic. being put back into the market in airline and already has spent flying for more than 15 years. The former Cathay Pacific senior the form of aircraft, in the form of $64.5 million on the startup. GBA It was that connection, said manager, Dragonair CEO and crew, in the form of people who will begin with three B737 jets, Hui, which prompted the idea of Airport Authority Hong Kong unfortunately have been made leased from a European lessor, establishing a new Hong Kong chief executive told Orient redundant by the reshaping and plans to expand to 30 aircraft airline. “Having an airline in Aviation the vision of adding an exercises of different airlines by 2025. Shenzhen and in Hong Kong is airline to the mix of carriers in around the world,” he said. Wong’s Hong Kong-based a good thing, particularly as it is the southern China greater bay “Of course, it is coincidental, East Pacific Holdings is in line with China’s development

New investors taking charge at Jet Airways

By Anjuli Bhargava trading, manufacturing, mining, to US$7 million to return them slots have been reallocated to fast-moving consumer goods, to running order. It is generally rival carriers and the airline’s London-based Kalrock Capital photo imaging and equipment to accepted the airline will need at staff have scattered in the last 18 and multibillionaire businessman, residential property development, least US$1 billion to be up and months. Murari Lal Jalan, have come five-star hotels and healthcare. running and another US$4 billion The aircraft in its fleet have together to revive India’s Jet The new owners have to survive COVID-19 and become to be prepared for their return Airways almost 18 months after said the resurrected airline viable. to service, a process estimated the country’s oldest private will be a full-service carrier India’s aviation industry is to take at least three months. airline went into administration. that will operate domestic and sceptical about the plan given the Cockpit and cabin crew have On October 17, the committee international networks. airline’s huge debt and regulatory to be recruited or re-employed of creditors of the bankrupt carrier, At press time, Jet had about issues it must overcome. It has and salaries owed to the airline’s which has been on the market for 10 aircraft compared with 112 in lost its slots in Mumbai, Delhi staff at the time of its entry into more than a year, approved a joint its heyday. In particular, each of its and airports serving its former administration negotiated. revival bid from Kalrock Capital 777s requires about US$5 million international network. The India In a domestic aviation market and Jalan. The offer must now that has seen demand collapse be approved by India’s aviation by 70% for the first nine months regulator. It is reported but not of this year, compared with confirmed that the carrier group annual average growth of 11% a owes US$4 billion to lessors, year for the last decade, aiming airports, suppliers and former to return Jet to profit is a risky employees. business. Kalrock Capital is a financial The odds of pulling off a advisory and asset management revival are long, especially since company set up by European the investment planned for the entrepreneur, Florian Fritsch. carrier falls far short of the true Jalan is Dubai-based with cost of returning the airline to the enterprises ranging from paper skies. ■

6 / ORIENT AVIATION / NOVEMBER 2020 ADDENDUM

strategy for the Pearl River Delta, “Honestly, the Cathay group is the airline has recruited a number The airline plans to serve now renamed the Greater Bay so big in Hong Kong. Don’t ever of former executives and senior major Mainland cities, including Area,” he said. dream of trying to compete with managers from the Cathay Pacific Beijing, Shanghai and provincial “There always has been close a giant. I don’t think anyone Group, Hong Kong Airlines and capitals, as well as second-tier relations between Hong Kong entering the market would be Hong Kong International Airport, tourism destinations such and Shenzhen, in particular, and able to compete with Cathay. Far many of whom have worked with as Hailar in Inner Mongolia, surrounding cities. The policy to from it,” Hui said. Hui. They include former Cathay Urumqi in Xinjiang, the Wudang develop the Greater Bay Area, “Look at it from another Pacific Airways engineering Mountains and Yichang Sanxia announced in 2018, is a drive to angle. It’s always a benefit for director, Derek Cridland, who in Hubei. Also on the agenda are facilitate deeper co-operation consumers to have a good has taken a consultancy role to services to Japan, South Korea, between Hong Kong and the Bay choice and that’s really what support the airline’s passage to Southeast Asia and some cities area,” he said. we are aiming at.” He said the being granted its Air Operator in South Asia. Wong told the “And of course, as this area positioning of GBA will be very Certificate. A former Hong Kong newspaper there was a potential continues to develop it will act different from the incumbents, Airlines president, Zhang Kui, is customer catchment of two as a push for the rest of the whether it will be Cathay-owned the chief operating officer of the billion passengers: 1.4 billion on country. There will be spin-off LCC, HK Express, or full-service airline. the Mainland and another 600 effects. Hong Kong is unique. Cathay itself. “We are aiming to In a recent interview with million in Asean countries. With Wong’s background, and we take a position somewhere in Hong Kong’s South China Given China has been leading certainly support him, we think between. In terms of marketing, Morning Post, Wong said at least the way in terms of recovery from the policy will give Hong Kong it will be a value carrier, similar 300 staff would be needed ahead the pandemic – its domestic traffic new impetus to develop.” to the position (a restructured) of the airline’s launch, with the is already pretty much back to Hui wants it made clear GBA Virgin Australia is taking in workforce expanding to 500 by pre-crisis levels – the prospects for is not planning a head-to-head Australia.” the end of 2021 and to 2,500 to Greater Bay Airlines certainly look clash with Cathay Pacific. While still looking for a CEO, 3,000 in five years. promising. ■

What worked in 2019 may not work in 2021 says Qantas Group boss

With nearly all of its critical opened in a matter of weeks. southern hemisphere summer international flying grounded, “Queensland has dragged its following the New South Wales Qantas Group CEO, Alan Joyce, heels on opening its borders to Government’s decision to open is clearly frustrated with the other states, but the day before its border to Victoria. Western haphazard approach of the its election it announced they Australia is opening its borders country’s various states to would remain closed to Greater later this month, though not to closing their borders between Sydney because of four cases. residents of Greater Sydney, the each other. In a speech at press Four! On a day of zero cases of country’s biggest city. time, Joyce praised the early community transmission, the Joyce said despite the virus efforts of the nation’s leaders in premier went further and said issues, some green shoots were fighting the pandemic. the closure would remain in appearing in the industry. “We “Unfortunately, the solidarity place until December. As we said remain hopeful that between of the national cabinet did not at the time, this is ridiculous. Qantas and Jetstar we will be last. Nowhere is this more Australia will be living with this back to 50% of our pre-COVID evident than the Rubik Cube virus for a long time and Sydney domestic flying by Christmas,” he approach to state borders,” is probably a world leader in said. “Some of our key markets in Joyce said in his speech to the managing it.” Europe and the United States are country’s business leaders. “At The Business Council of Sydney and Queensland for likely to remain closed for some first, decisions around borders Australia estimated the country the month of November, which time, probably until an effective were made on the basis of the is losing $319 million a day would cost the Queensland vaccine arrives. health risk and that’s fair enough. because of closed borders. “This economy hundreds of millions of “But we have a one-way “Now they seem to be driven inertia is destroying jobs and dollars a week, Joyce said. bubble with New Zealand and by politics and populism. Before creating a mountain of red tape His speech was delivered as the [Australian] government is its recent election, the Northern for business,” Joyce said. it was announced Qantas and talking about bubbles with some Territory government said its Qantas had been forced to Jetstar would operate thousands parts of Asia and the Pacific. borders would be closed for 18 put on hold plans to add more of flights to and from Melbourne We can pivot quickly if that months. After the election, they than 1,000 flights between and regional Victoria over the happens.” ■

NOVEMBER 2020 / ORIENT AVIATION / 7 NEWS BACKGROUNDER

year,” she said. Despite the recovery, China’s Passenger rebound no airlines have not avoided the financial pain of the global COVID-19 crisis. The “Big Three” antidote to Mainland carriers have reported combined losses of almost $4 billion in the first half of this year and the boost in domestic travel will not return airline losses them to the black in 2020. Like airlines elsewhere, they are raising fresh capital to By associate editor and chief correspondent, Tom Ballantyne keep their heads above water. Guangzhou-based CSA is seeking ith air travel not in profit – they are luring In September a China-based $2.4 billion by selling 160 million in most of the passengers aboard with cheaper civil aviation data service provider, A Share convertible bonds. Asia-Pacific air fares – but they are boosting VariFlight, was reporting the Shanghai-based CEA intends to struggling the hard-hit travel sector. China’s country’s airports were handling increase its cash reserves by $4.6 for renewed Ministry of Culture and Tourism more than 90% of the volume billion with the sale of 32% of Wtraction in the face of the recently reported the nation’s registered in the same month its equity to four state-owned coronavirus crisis, the country at tourist attractions received 637 last year. Although international businesses. the epicentre of the pandemic, million visits in the October holiday flights remained extremely low, Bloomberg Intelligence China, has seen its domestic airline week, 79% of the visits made they also had increased slightly said Air China’s losses will be traffic return to near 2019 levels. last year. Tourism revenue was in September compared with exacerbated by troubles at its And if there was any US$68.5 billion, 69.9% of 2019. August, associates and could reach more doubt China was leading the The latest figures underpin Given there are no fresh than $2 billion this year, even with “new normal” of Asia-Pacific the recovery taking place since outbreaks of the virus, airlines the increase in domestic travel. commercial aviation, at least China’s airlines hit record lows and travel industry executives CEA could experience a 2020 in domestic air travel, that early in the year from the impact are confident Mainland domestic revenue slide of 50% and CSA evaporated when the country of COVID-19. In February, during travel patterns will be completely sales may drop 41%, forecast celebrated its annual national the worst of China’s slowdown, back to normal by the end of analysts, James Teo and Chris day holiday in the first week of the country’s aviation market the year. Muckensturm. October. Domestic passenger shrank to the size of Portugal’s. In a recent online aviation In the meantime, China is numbers for the Golden Week Now, according to aviation data summit, the chief executive of pressing ahead with aviation reached 13.26 million, or 91.07% supplier OAG, China’s three major Chinese travel agency Trip.com, infrastructure developments of levels recorded in the same carriers, China Southern Airlines Jane Sun, said people now feel outlined in its latest five-year period of 2019, reported the Civil (CSA), China Eastern Airlines “very safe” flying within China plan. They include the completion Aviation Administration of China. (CEA) and Air China, have risen and demand continues to pick of the starfish-shaped Qingdao With the country reporting up the ladder of the world’s top up strongly. Even business travel Jiaodong International Airport, relative control over a pandemic 20 airlines to positions two, three will rebound, she said, dismissing which can handle 35 million that continues to cripple the and six, respectively. By July, in concerns work trips will be a thing passengers a year and operate aviation industry worldwide a Global Recovery Update from of the past now people have landings or take-offs every Chinese airlines are filling their ForwardKeys, Chinese airline become accustomed to virtual 73 seconds, and a $7.2 billion seats on local air routes. travellers contributed 68% of total meetings. “Domestic travel will be expansion of Xi’an International Mainland carriers are still air travel in the Asia-Pacific. back to normal by the end of this airport. ■

8 / ORIENT AVIATION / NOVEMBER 2020 NEWS BACKGROUNDER

More staff cuts on horizon at several Asia-Pacific carriers

By associate editor and chief correspondent, Tom Ballantyne

and wages. These costs are much domestic Air Japan unit, and harder to reduce, particularly “pursue sustainable growth quickly. That is a key reason through transforming the services they were making massive of the Group’s airlines to cater to losses in the second quarter and a wider range of customer needs burning cash,” said IATA’s chief in price range and services”. It economist, Brian Pearce, last will target demand for low-cost, month. There was little indication medium distance flights to the first half of next year will be Southeast Asia and with leet downsizing and friends and relatives (VFR) significantly better, he added. 737s configured with 300 seats. job cuts have become travel, passenger preference for In the face of the crisis and JAL reported a net loss the order of the day for sustainable flying policies and essential to its transformation of US$1.5 billion for the six some of the Asia-Pacific’s high standards of automated is ANA’s decision to dispose of months to September 30. It biggest airlines as their options that improve hygiene for 30 B777s, but ANA president has implemented cost-cutting Foperations and finances continue customers. and chief executive, Shinya measures and benefited from a to be rocked by a coronavirus The grim statistics of 2020 Katanozaka, has ruled out the government program launched pandemic that refuses to abate. forcing radical change on some of possibility of receiving additional in late July that subsidizes 35% A little more than a the most successful carriers in the government support. “We are of domestic travel expenses. month after Singapore Airlines world come as the International not expecting it,” he said during JAL said it would take time for announced it was reducing its Air Transport Association (IATA) a news conference after the international air travel demand workforce by 4,300 in the face warned airlines will have to company announced its earnings to recover as long as strict border of the “debilitating impact” of reduce operating costs by at outlook. He also brushed off controls remain in place amid the the pandemic, Hong Kong’s least 30% in 2021 to counter a concerns about the financial coronavirus pandemic. Cathay Pacific Group disclosed it forecast 50% plunge in revenue standing of ANA and promised JAL introduced new would make almost 6,000 staff from pre-COVID-19 levels. The a return to profitability in fiscal accounting standards, starting redundant and close its regional major steps taken by the region’s 2021 with a shift to its new in the current business year, carrier, Cathay Dragon. airlines to reduce costs have business model. and is considering raising as In Japan, both major carriers not been sufficient, leaving the ANA will receive $3.8 billion much as $2.9 billion in capital to are reporting record losses. Japan industry with little choice but to in subordinated loans from major strengthen its financial standing. Airlines (JAL) is projecting a net trim their largest expenses, one of banks, including the government- For JAL, the situation is a matter loss of more than US$1.9 billion which is the cost of labour. That affiliated Development Bank of of déjà vu. After it filed for for its current fiscal year. It is means downsizing staff, which Japan, to strengthen its financial bankruptcy in 2010, it undertook turning unprofitable for the first is often extremely difficult in the base. drastic restructuring measures time since relisting on the Tokyo face of labour unions. In addition to ANA and that reduced its fleet by more stock market in 2012 after its “Airlines have to shell out its low-cost subsidiary Peach than 100 aircraft and eliminated 2010 bankruptcy. money for maintenance and Aviation, the group will establish about 16,000 staff from its Rival All Nippon Airways repairs as well as leasing aircraft a third airline based on its payroll. ■ (ANA) said it expected to report a massive $4.8 billion deficit for the year. At press time, the airline’s parent company, ANA HOLDINGS INC. (ANA HD), unveiled its “Transformative Measures to a New Business Model” to take into account reduced business class travel, robust and increased demand for leisure and visiting

NOVEMBER 2020 / ORIENT AVIATION / 9 NEWS BACKGROUNDER

expert of the industry, to start his own airline after his sacking Razzle dazzle created enormous public interest across the country. Very quickly he was dubbed “Prince Hamlet” start-up threatens amid widespread speculation that retaliation against the family was the major motive for his staid Taiwan carriers decision to launch Starlux. Chang always dismisses this as gossip. The story of a bunch of Charismatic Chang Kuo-wei, newly enriched by a court feuding would-be tycoons could ruling in favour of his sole US$464 million inheritance of the not but help stoke public interest in the startup carrier, especially Evergreen Group, is Taiwan’s airline shooting star, reports as Chang junior’s father had left Tomasz Sniedziewski from Taiwan. a hand written will near to his time of death that bequeathed the entire company to his youngest son and EVA Air 777 he aviation industry of Its beginning was not best of EVA Air since 2013, took an captain. As it has turned out, Taiwan became much timed. It started its operations unpredictable turn after the aviation enthusiasts have proved more interesting in almost at the same time the passing away of his eighty eight- to be a very important group in mid-2016 when it was COVID-19 pandemic put the year-old father, Chang Yung-fa, cementing interest in the new announced Chang whole industry on hold. Its the founder of the Evergreen airline. TKuo-wei, the former chairman of launch date was 12 months later shipping group and the owner of Pilot Chang had not only EVA Air and a prominent figure than planned. EVA Airways. been a successful chairman of in Taiwanese aviation, would The question being asked Soon afterwards, Chang one of Taiwan’s major airlines, he start his own airline, challenging now is will the current crisis break who is the youngest son and the also was leading EVA Air when it the long-established duopoly of the new carrier or will it present only child of Chang Yung-fa’s was better regarded than China the country’s two major carriers. opportunities for a brand, and second wife, was ousted from his Airlines for its quality and safety Starlux Airlines, launched in the carrier, that has set out to position as EVA Air chairman by management. January this year, was conceived change the airline status quo in fellow board members, mainly With his background as by its creator as a boutique Taiwan? his family rivals, in particular his a working long-haul captain, airline, promising passengers Creating opportunity out half-brother, Chang Kuo-cheng. Chang was not shy about a premium travel experience of adversity might well be in The decision by commercial offering his opinions on industry backed by the best product on the DNA of Chang. In 2016, pilot Chang, familiar to issues, an outspokenness that the market. the life of Chang, the chairman Taiwanese as an outspoken earned him a lot of fans. Cleverly, since the beginnings of the Starlux project, Chang has tapped into his personal brand to promote the airline. He went through type-rating training for the A321neo to pilot the first delivery flight to Starlux from Toulouse in late October last year. The airline’s PR team used Facebook to directly contact followers of the flight. Its first stop in Taiwan was Kaohsiung airport. Despite a very early morning arrival and short notice of the stopover on social media, the airfield’s perimeters were crowded with plane spotters and fans. Soon after the aircraft landed, social media was flooded with images of the Airbus plane

10 / ORIENT AVIATION / NOVEMBER 2020 NEWS BACKGROUNDER

in Starlux’s livery. Facebook has planned, but that the plane will several groups of Starlux fans be equipped with a first class in Taiwan with one of them cabin. registering more than 100,000 Chang is no stranger to members. going against conventional Such PR stunts have become wisdom. One of the informal the trademark of Starlux and managerial truths in the as the pandemic drags on they industry is that the colors of an are essential to keeping the aircraft livery have no effect on brand front and centre in Taiwan profitability. despite the major disruption to The brainchild of Chang, regular operations brought on by EVA Air managed to bend this the pandemic. rule by creating, in cooperation Of three initial Starlux with Japanese company Sanrio, destinations out of , the the Hello Kitty Jet. The concept carrier suspended its service grew into a small, dedicated fleet to the Special Administrative operating on specific routes that Region of less than two attracted great interest and filled weeks after the inaugural cross planes. strait flight. In quick succession There are many stories in March, Taipei to in about Chang, a huge aviation and ’s enthusiast and constant learner. were put on indefinite hold. In He started his climb through the September, the carrier’s website ranks at EVA by working at the said routes to Penang and Macau airline’s check-in and baggage were being operated, but Taipei- counters and has a proven Cebu has been postponed twice inflight entertainment system for was not only spending money record of being ahead of general and is now planned to launch every passenger and Wi-Fi with on fixed costs such as staff thinking in the industry. next March. basic access. salaries, but on construction of Perhaps the most famous In the meantime, Starlux is As an airline from Taiwan, warehouses and its own MRO of his documented insights operating flights to nowhere and the island where enjoying tasty facilities, pointed out Nieh happened in the early 2000s has resurrected its e-commerce food is rooted deeply in local Kuo-wei, the Starlux Airlines when he convinced his father, platform, Starlux Shop. The culture, Starlux offers a choice spokesman quoted by local UDN an ardent fan of the 747 as online site’s limited offer of moon of favorite local meals, prepared News. the foundation of the carrier’s cakes packaged in a miniature in collaboration with famous The commitment to long-haul fleet, to order the new air cargo box to celebrate the local restaurants, including expanding the brand remains 777-300ER. Mid-Autumn festival generated Michelin-starred Longtail in strong, even during the “Building the right fleet of substantial interest. Taipei. It prepares the menus pandemic. In September, Starlux planes is crucial to the survival “None of these campaigns for Starlux’s business class announced it would lease of a carrier, which could suffer constitute our genuine business. travelers. The crew’s uniforms are eight A330-900neo, the first for up to 20 years if the wrong They contribute only a tiny created by local designer, Sean Taiwanese carrier to commit to model is purchased. The 777 profit to our revenue, but as the Yin, the boarding music was the type. Deliveries will start in push was the best bet I’ve ever pandemic drags on, we can only composed for Starlux by famous the fourth quarter of next year. made,” Chang told Forbes rely on our creativity to maintain jazz musician, Peter White, and Starlux’s order book is now 10 magazine in 2014. some buzz”, explained Chang Taiwanese fragrance brand, A350-900s, nine A350-1000s Chang is widely considered in widely read CommonWealth P.Seven, developed a unique and an agreement to acquire to be a friend of . His magazine. scent to enhance the ambience three more A321neos above its personal aluminum Rimowa Perhaps the most important of the carrier’s cabins. previous order of 10 of the type. pilot suitcase is decorated with factor in creating Starlux’s strong The investment necessary to Following the recent a big Boeing logo sticker, but brand is the carrier’s dedication create a brand to dazzle travelers signings, Starlux will have 39 for Starlux he has chosen Airbus to providing a premium has a hefty price tag. In the first aircraft by 2024, putting it on par aircraft. passenger experience. half of 2020, Starlux lost NT$1.31 with the operations at CAL and The COVID-19 pandemic, The interior of the A321neo, billion (US$44.8 million), NT$1 EVA Air. In a decision bucking a although a setback to the initial designed by the renowned million less than . premium cabin trend, the airline plans of Starlux, might present BMW’s Designworks studio, To June 30, the full-service has announced the A350 will opportunities for the new airline. offers business class seats that carrier had accumulated losses join its fleet at the beginning of It is believed by many experts recline to a fully flat bed, an of NT$2.81 billion. The company 2022, slightly later than originally the demand decline from the

NOVEMBER 2020 / ORIENT AVIATION / 11 NEWS BACKGROUNDER

pandemic outbreak will upend is becoming more assertive in two main airlines of Taiwan, held identification practice for the accepted model of business challenging its established rivals, which already were struggling the nation’s airlines, indicating travelers providing a major CAL and EVA. pre-pandemic from extended Chang will not be swayed by source of income for airlines. After announcing the industrial disputes with their superstition. In the new reality, post- Starlux project in 2016, Chang employees. In the end, it is Chang COVID-19, the biggest patrons of was careful to avoid inferring Perhaps the most symbolic Kuo-wei and his drive that has the airlines might be passengers he would be directly competing and telling indication of Starlux’s brought Starlux to life. His ability paying for premium flying with his former airline. In fact, he ambitions was the decision to attract talented people to the with their own money thereby did not rule out the possibility of to break the long-standing airline as well as solid business choosing their own airline rather some form of cooperation with Taiwanese tradition of aircraft partners has created a brand that than having to accept the carrier EVA at the time. registrations. not only stands out in the local choice of their corporate bosses. But Starlux’s order book Tail numbers in Taiwan that airline industry but also across With its elevated brand that extension, announced in consist of the letter B followed the entire corporate landscape of is capturing the imagination of September, is an indication by five digits would normally not Taiwan, a country more famous passengers expecting grand Chang and his team are no include the “unlucky” number for its OEM and ODM ventures flying, Starlux might benefit from longer wasting time in their “4” at the front or at the end than groundbreaking branding. this change. The added bonus efforts to become a force in of the registration. With more In the current most for the startup is reduced air commercial aviation in Taiwan. than 260 aircraft registered in unpredictable times for the traffic at Taipei Taoyuan Airport In October, Starlux said it Taiwan, not a single one of them industry, it is very difficult to presumably making it easier for would inaugurate twice-weekly has broken this rule, claimed make safe bets about any the airline to be awarded quality flights to major Asia hubs, UDN News, until now. The latest players. It would appear though slots. Suvarnabhumi, addition to Starlux’s fleet, an that Chang, who is 50 this year, is Opportunities from the Kansai International and Tokyo A321neo, registration B-58204, determined to stand and fight for pandemic could be behind the Narita, from December. It is a was delivered in November. It will the star in the logo of his Starlux recent changes at Starlux, which decision that will challenge the be the first exception to the long- Airlines to shine in full. ■

Star power of “K.W.”

Four years ago, at age 45 and finding and his half-brother, Chang Kuo-cheng, himself outsted from the family firm, the was appointed head of the group’s shipping Evergreen Group scion and aviation nut, division, Evergreen Marine. “K.W.” Chang, decided to act on his belief Their father, it is reported, was an Taiwan deserved a better full-service carrier advocate of tough love and it was not long, in than what was on offer. 2006, before K.W. walked away from the job. In mid-2016, he announced the Within four years, after obtaining his formation of the company that would own wings with Boeing, he was back at the carrier and operate Starlux Airlines. He received as chief executive and vice president and regulatory approval for the startup a year later flying on the side. and intended to commence Starlux routes In 2013, he became EVA Air chairman early in the first quarter of 2019. A hyped up and was running the airline group when his Taiwanese market was ready for the launch. father died in 2016. The elder Chang’s will, For various reasons, Starlux did not begin handwritten as he approached death, left the flying until last January: experiencing some entire Evergreen group to K.W. infuriating of the worst luck in the history of Asia-Pacific his three siblings. They engineered his aviation when it comes to airline launches. ousting from the airline and instigated court Equipped with A321 family aircraft proceedings to challenge the authenticity that have hardly flown anyway in the last Born into a gilded Taiwanese dynasty, of the will. 10 months, Starlux’s management team he studied economics, and spent hours at In 2017, Starlux was approved by recently announced the start of three regional aircraft manufacturer, McDonnell Douglas, Taiwan’s regulator and plans to launch the destinations from Taipei to Bangkok, Osaka in the U.S before returning to Taiwan and carrier, with an emphasis on full service and Tokyo Narita in December. Essential to EVA Air in 1996 passenger luxury, began in earnest. the long-term business plan of the carrier are He began his climb to the top of the Its first flight, Taipei to Macau, flew destinations in North America and Europe. family business in baggage processing and in January this year and was intended to The impact of COVID-19 on the startup passenger check-in. He was known for his capture market demand during Lunar New is not the first time the fourth child of understanding of aircraft engineering and Year holiday break. Only weeks later the Evergreen Group founder and owner, Chang MRO, before he moved to head office two scheduled flights were suspended after Yung-fa, has faced uncertainty head on - and years later. countries began restricting entry to visitors had to get out of a mess. At the age of 34, he took charge of EVA as COVID-19 spread beyond China.

12 / ORIENT AVIATION / NOVEMBER 2020 NEWS BACKGROUNDER

Aircraft cabins safer than most indoor public spaces

By associate editor and chief correspondent, Tom Ballantyne

t is official, at least as far IATA’s New Zealand-based different variations of individual as the world’s three major medical advisor, Dr. David Powell, overhead passenger air vents commercial jet manufacturers said since January 2020 only 44 (known as gaspers) when on or are concerned. If you want cases reported cases of COVID-19 off. to reduce your chances of are believed to have been “This modelling determined Icatching COVID-19, flying in an associated with a flight journey. the number of cough particles aircraft is one of the best places “The risk of a passenger that entered the breathing space to be. As the world’s airlines contracting COVID-19 on board of other passengers,” said Boeing continue their fight to win back appears very low. With only chief engineer Confident Travel public confidence in air travel, 44 identified potential cases of Initiative, Dan Freeman. “We then Airbus, Boeing and Embraer have flight-related transmission from compared a similar scenario in IATA’s Dr. Powell said joined forces to release the results 1.2 billion travellers is one case other environments, such as an aircraft design character- of extensive testing they have in every 27 million travellers,” he office conference room. Based istics add another layer of commissioned to prove their point. said. on the airborne particle count, protection that contributes In a recent online media “We recognize this may be an passengers sitting next to one to the low incidence of discussion hosted by the underestimate, but even if 90% another on an airplane are the inflight transmission of the International Air Transport of the cases were unreported, it same as standing more than virus. These include: Association (IATA) representatives would be one case for every 2.7 seven feet (or two meters) apart in • Limited face-to-face of each of the aircraft OEMs said million travellers. These figures a typical building environment.” interactions as passengers face forward and move they had employed separate are extremely reassuring and the Embraer analysed the cabin about very little computational fluid dynamics vast majority of published cases environment by considering a • The seatback acting as (CFD) research in their aircraft occurred before the wearing of coughing passenger in several a physical barrier to air to determine the possibility of face coverings inflight became different seats and air flow movement from one row COVID-19 transmissions in flight. widespread.” conditions in different aircraft to to another The research found that Airbus Engineering and the measure the variables and their • The minimization of aircraft airflow systems, High leader of the Airbus Keep Trust effects. Its tests also showed the forward-aft flow of air Efficiency Particulate Air (HEPA) in Air Travel Initiative, Bruno risk of on board transmission with a segmented flow filters, the natural barrier of the Fargeon, said the company used was extremely low. The data on design directed generally seatback, the downward flow of CFD to create a highly accurate in-flight transmissions that may downward from ceiling to floor air and high rates of air exchange simulation of air in an A320 have occurred supported these • The high rate of fresh air efficiently reduced the risk of cabin to determine how droplets findings. coming into the cabin. Air disease transmission on board in resulting from a cough move in Embraer senior vice-president is exchanged 20-30 times normal times. the cabin airflow. The simulation of engineering, technology and per hour on board most Additionally, wearing face calculated parameters such as air strategy, Luis Carlos Affonso, aircraft, which compared coverings provided a significant speed, direction and temperature said: “the human need to travel, very favourably with extra layer of protection that at 50 million points in the cabin or to connect and to see our loved the average office space meant being seated in close up to 1,000 times per second. ones has not disappeared. In fact, (average 2-3 times per proximity in an aircraft cabin was Boeing researchers, also at times like this, we need our hour) or schools (average safer than most other indoor using CFD, tracked the movement families and friends even more. 10-15 times per hour). • The use of HEPA filters environments. Methodologies of particles around the cabin from “Our message today is because that have more than 99.9% used by each manufacturer coughing and breathing. Various of the technology and procedures bacteria/virus removal differed slightly, but each detailed scenarios studied including the in place, you can fly safely. All the efficiency rate ensuring simulation confirmed aircraft coughing passenger with and research demonstrates this. In fact, the air supply entering the airflow systems control the without a mask, the coughing the cabin of a commercial aircraft cabin is not a pathway for movement of particles in the cabin passenger located in various seats is one of the safer spaces available introducing microbes. thereby limiting virus spread. including the middle seat, and anywhere during this pandemic.” ■

NOVEMBER 2020 / ORIENT AVIATION / 13 MAIN STORY OVERCAUTIOUS GOVERNMENTS STIFLING REGION’S AIRLINE RECOVERY When the region’s major airline leaders, members of the Association of Asia Pacific Airlines (AAPA), hold their annual Assembly of Presidents this month they will be in unknown territory. For the first time the event will be a virtual gathering with discussions dominated by how they can come back from a year of hell. Associate editor and chief correspondent, Tom Ballantyne, reports.

espite the gloom and doom of the worst crisis aviation has faced in its history, Association of Asia Pacific Airlines (AAPA) director general, Subhas Menon, is far from pessimistic about the future of his airline members. Airlines Dmust be optimistic, he insisted, when he spoke to Orient Aviation last month. “Going on its track record this industry is one that is able to pick itself up. And I can tell you I have not seen aviation speaking so much with one voice as we are seeing in this crisis,” he said. “There is no dissent among stakeholders in our ecosystem about the path to recovery. They are all singing from the same hymn sheet. This is really a positive. The solidarity and the commitment of the industry to restoring international mobility will be critical to the future, not only of aviation but for the global economy.” At the same time, the Singapore Airlines (SIA) veteran, who took the helm of the regional airline body in March just as the COVID-19 crisis began to bite deeply into industry revenue, is far from ignoring the dire straits in which carriers find themselves. The latest AAPA traffic figures, for September,

14 / ORIENT AVIATION / NOVEMBER 2020 MAIN STORY

documented that Asia-Pacific airlines carried 1.1 million international borders. It is as if they are saying ‘let’s fix the international passengers in the month, 3.6% of the 30 million problem locally, whether it is possible or not, and then we will passengers it transported a year earlier. Average international attend to the international parts of our economy’,” he said. passenger load factor for the reported period was 31.7%. Even “It has been a much unexpected evolution of the situation. international air cargo, regarded as a bright spot in the We all feel pretty disheartened thinking ahead. Unless industry, registered a 29.9% decline year-on-year. governments are persuaded to re-open their borders it is very Menon is well equipped to withstand the pressures of the difficult to see us up and running again.” crisis and guide the regional industry forward. A graduate of Menon’s argument is the Asia-Pacific does not have to be the National University of Singapore, with a Bachelor of Social so draconian with its border restrictions and quarantine rules. Science (Honours) in Sociology, he has worked across a wide With few exceptions, most countries in the region are spectrum of roles at SIA, including international and successfully containing the spread of the virus, he said. government relations, marketing, product development, “There is a disconnect. Why is the Asia-Pacific taking such logistics, country and regional management and a spell as a risk averse approach to border closures? It does not have to be CEO of SIA’s regional subsidiary, SilkAir. so bad if risk assessment is applied and mitigated. By now, we Recovery, he said, will not come easily or soon. As the first should be seeing these travel bubbles in the region but it is not half of 2020 progressed, with COVID-19 spreading like happening,” he said. wildfire through China, into Asia and then across the world, It is an argument that will undoubtedly be stressed at this the industry assessment was it would take six to nine months month’s Assembly, which was to have been hosted by Japan for the pandemic to be contained and recovery to commence. Airlines in Tokyo. Now to be virtual, Menon said it was the “Frankly it has gotten worse. Not from the point of view of only alternative given the restrictions on travel. Even if airline the virus, because the second waves and all that had been executives from around the region could enter Japan, they predicted, but because the response of various governments in could not do it without being quarantined. And when they the Asia-Pacific was totally unexpected,” he said. travel back home, they would have to go into quarantine again. “Countries like Australia and New Zealand, even It is a situation Menon himself has had to accept. A virtual Singapore and others in Southeast Asia, were taking a very, Assembly and meetings are all very well, but he misses very risk averse approach to fighting the virus knowing full face-to-face interaction. As a Singaporean he was forced to well tourism and trade were very important parts of the leave AAPA headquarters in Kuala Lumpur and return to his economy.” home country shortly after taking charge. He later travelled to That reaction, said Menon, took airlines by surprise. “They Australia and went through quarantine again, where he [governments] have been digging in. They are prepared to wait remains today, operating from Sydney. until a vaccine is available and distributed before they open Returning to Kuala Lumpur will not be happening any time soon, he said, because it would mean going into a government isolation centre for 14 days and prevent him from The European Centre for leaving Malaysia for three months after he completed Disease Prevention and Control, quarantine. which publishes weekly numbers on the AAPA staff also face disruption. Initially working from home after the crisis broke, they returned to the office. But in number of cases per 100,000 in each early October, when virus case numbers started to rise again in region, puts the Asia-Pacific at less Malaysia, they returned to their homes to wait for the situation to stabilize. than 20 cases per 100,000 population. In the meantime, airlines in the Asia-Pacific, like their These figures compare with Europe, peers worldwide, are struggling to survive. Although the at 60 and above and America, which International Air Transport Association (IATA) has warned the industry will burn through US$77 billion in cash in the second is closer to 150 and above. So, in the half of this year - almost $13 billion a month or $300,000 per Asia-Pacific I would say containment minute - Menon does not forecast mounting bankruptcies is relatively successful. But if you among his members or at other airlines in the region. look at the United Nations World REGION’S GOVERNMENTS “WILL DO THE Trade Organization (UNWTO) [report] RIGHT THING” on regions where destinations “It is like asking how long is a piece of string? If the spool runs out, what happens? Ultimately, it depends on the wherewithal have imposed border closures, of governments and their shareholders. So far, they have stood the Asia-Pacific is the highest by the airlines, giving them as much support as they can. It all boils down to the means they have. When push comes to shove Subhas Menon governments realise how important aviation and international Association of Asia Pacific Airlines director general tourism and trade are to their economies and they will do the

NOVEMBER 2020 / ORIENT AVIATION / 15 MAIN STORY

right thing,” he said. “Rapid result tests are already The solution is not to continually available but they are being validated in refinance and refund, Menon terms of their accuracy. If they are believed. “The solution is to start validated and their accuracy is reasonable reopening borders and let airlines and it is above 90%, that is a pretty earn their own keep. International reassuring measure so you can implement isolation and continuance of that,” he said. funding of airlines from government coffers are not COVID-19 TESTS MUST BE solutions for the future of aviation AFFORDABLE or the economy,” he said. “Don’t forget that if testing is not accessible to “At the same time, we are the general population it is not going to help actively advocating Asia-Pacific air travel. It must be cheap, affordable. In governments to mutually Singapore, if you want to do a test, you have to develop travel bubbles and pay $200 a pop. If you have a family of four expand bilateral travel bubbles to a travel that’s going to be more than one air ticket. bubble in the Asia-Pacific.” “Of course, it can be passed on to the Right now, the key battle AAPA and other industry bodies travellers if it is inexpensive but otherwise governments will is fighting is quarantine restrictions, the single major have to pay for it.” contributor to the dramatic downturn in air travel with the If and when a vaccine becomes available, Menon said there exception of the COVID-19 outbreak itself. will be major issues to resolve in delivering it worldwide. Like the leaders of other aviation organizations, Menon is “There are not enough flights for that. I was listening to an putting a great deal of effort into lobbying governments on this interview with an executive from the largest producer of front. He considers Singapore took a step in the right direction vaccine (an institute in India) who said they can produce a lot when the country’s minister of transport announced he would of vaccine, but pharmaceutical companies must gear up to pursue travel bubbles within the region. reproduce these vaccines,” he said. “If you read his statement carefully, one of the points he “He said at the moment he did not think they had the made is if you are going to have a travel bubble between capacity to do so. That is one part of the equation. Can you countries where the infection rate is equally low then the risk of produce enough vaccines for the whole world? And two, do we imported cases is no higher than you would have in your local have enough flights to carry the vaccine to all those countries? community,” he said. It is another reason why cross-border travel should be slowly “For instance, if you are going to allow travel from re-opened.” Singapore to Australia, where the prevalence is in single digits Menon is cautious about predicting the timing of a and is the same in Singapore, travelling between these two recovery from the pandemic. “IATA is saying we can’t return to places is no higher in risk than if somebody is coming from 2019 levels until 2024. The longer it takes for governments to northern Sydney to the heart of Sydney. The risk of imported reopen borders, and it depends on region to region, the cases can be mitigated if you apply such risk assessment.” timetable will slip further. This assessment was made on the basis there will be some restart by the end of this year. Already If governments are still wedded we are in October and we don’t see many signs Asia-Pacific governments are reopening borders. So that could slip,” he said. to the idea of quarantine it should If more travel bubbles are introduced and testing becomes only be applied to people who are more accessible, Menon said “realistically we will see a restart of flights towards the end of the year. December is generally a travelling from high risk countries. holiday season when families want to get together so that Otherwise, if it applies to equal should see VFR (Visiting Friends and Relatives) traffic, and risk or low risk countries you can then residents stuck abroad from COVID-19 starting to go home for the holiday season”. mitigate the risk of asymptomatic “Maybe 10% or 20% of what it used to be and then we go cases by conducting testing from there. If the situation begins to stabilize, governments are before departure. Not on arrival happy with the containment of the virus and measures are in place, maybe they will expand the bubble and perhaps we can because then it is too late. start to look at travel to other regions where containment also IATA and the ICAO are recommending is working quite well,” he said. this. It really all depends on GREATER DEPENDENCE ON AIR CARGO governments accepting it How does he see the shape of the industry when recovery commences? “Firstly, there will be a greater dependence on

16 / ORIENT AVIATION / NOVEMBER 2020 MAIN STORY

cargo. Cargo has been a sort of silver lining. I don’t want to Menon does not see 2021 as a year of rapid recovery. “It emphasize that too much because when you reduce passenger will just be a restart, getting ourselves back on our feet and flights you also reduce cargo capacity,” he said. slowly moving on. It also depends on how many flights airlines “The main restriction on cargo demand is lack of capacity. are able to implement. Cargo will help them to raise some Generally speaking, cargo will become an important part of money. Hopefully, fuel price will stay low because of lack of shaping the recovery.” demand. I would not say they will make lots of money, but at Secondly, Menon predicted a change in airline fleets. least they can get on their feet,” he said. “Already, quite a lot of airlines have parked their bigger aircraft “The industry has gone through many crises and it always and are looking at more fuel efficient and cost-effective fleets comes out of them stronger and more resilient. If we can get for operating international flights. You will see some of that. going by the end of the year, or at least the beginning of next Then it is a matter of nurturing demand, building confidence,” year, we might see green shoots and these green shoots will he said. develop into recovery.” ■ Toil and trouble of travel bubbles By associate editor and chief correspondent, analyst, Brendan Sobie. “None of these steps have had a Tom Ballantyne significant impact and combined have generated even less additional traffic than the resumption of transit. The or months, Australia’s politicians have been requirements associated with the five green lanes, which promising their citizens the opening of a travel started in June with China followed by Malaysia in August bubble with New Zealand, but when it finally and Brunei, South Korea and Japan in September, are eventuated in October, it was not quite what they onerous, limiting demand to a trickle,” he said. were expecting. It turned out to be a one-way street. Elsewhere, there has been just as much difficulty. India FNew Zealanders can enter Australia but Australians can’t fly opened a route to Germany in September and then closed it in to New Zealand - although both countries have extremely October because of the spike in cases in Europe and disputes low levels of COVID-19. over access for Indian airlines into Germany. In fact, Australians can’t yet fly overseas without The is lifting a ban on non-essential foreign permission from government authorities. And if they do trips by Filipinos, but the immigration bureau said the move depart to foreign climes in cases of extreme necessity, they did not immediately spark large numbers of departures for have to quarantine for 14 days in a hotel on their return to tourism and leisure. The government has gradually eased their home country. travel restrictions to bolster the economy, which slipped into The new Australia-New Zealand entry rules are a perfect recession in the second quarter of this year following months example of the complexity so-called bilateral air route bubbles of lockdown and quarantine. can create. Where the bubbles do exist, uptake is extremely has opened up to China and the good news was low, with various restrictions such as testing, mask-wearing the first batch of Chinese tourists who arrived in Bangkok in and quarantine deterring significant numbers of potential October all proved negative to the coronavirus. Visitors from travellers from taking advantage of the bubbles. Scandinavia – a major source of tourists for Thailand – will be There are a number of bilateral agreements in place. South allowed to enter the country from this month. Last month, Korean and Japanese airlines can fly to China and there is a Hong Kong said it will re-open its border with China for bubble between Singapore and China. Singapore has probably returning citizens. been most active in opening up links within the region, the All in all, it has become clear bilateral air bubbles won’t do latest being planned with Hong Kong. much to boost international air travel until quarantine This is hardly surprising as both Singapore Changi and restrictions are lifted and rapid testing becomes the norm. ■ Hong Kong International Airport have been walloped by the pandemic. At these major transit ports, traffic at Singapore Airlines and Cathay Pacific Airways is down nearly 99% on previous year levels. Singapore has been more aggressive than Hong Kong in its attempts to kick start a recovery, opening bilateral green lanes with five other countries and also four other countries by waiving quarantine requirements, said Singapore-based

NOVEMBER 2020 / ORIENT AVIATION / 17 AIR CARGO

Industry wallflower new belle of aviation ball Air freight remains the one bright spot for the airline industry as the coronavirus pandemic continues to bite deeply into the passenger business. Yet air cargo operators are struggling to provide the capacity to meet demand, reports associate editor and chief correspondent, Tom Ballantyne.

he International Air insufficient capacity. Demand Transport Association’s moved slightly in a positive (IATA) chief economist, direction month-on-month, Brian Pearce, makes however levels still remain it clear just how depressed compared with 2019. Tmuch pressure aviation’s air Cargo tonne-kilometres cargo operators are experiencing. (CTKs) were 12.6% below “Freighters are being used as previous year levels in August intensively as possible. I think (-14% for international they are being flown more than operations), a modest 11 hours a day which is a record. improvement from the 14.4% are improving, but they have 2020. Nevertheless, this will not Airlines have been trying to use year-on-year drop recorded in not yet been fully reflected in offset haemorrhaging passenger passenger aircraft to carry cargo. July. But global capacity shrank growing air cargo shipments,” revenue,” it said. More than 2,000 passenger aircraft by 29.4%. Belly capacity in said IATA director general and CAPA tracks freight capacity are carrying cargo. Airlines are passenger jets for international air CEO, Alexandre de Juniac. trends by combining flight doing the best they can to serve cargo was 67% below the levels “That said, air cargo is much schedules data from OAG with the needs,” he said. of August 2019. stronger than the passenger cargo payload (in kilograms) Despite this, airlines cannot Asia-Pacific airlines, the side of the business. One of for each aircraft. It has pointed satisfy demand. “The issue for world’s biggest movers of air our biggest challenges remains out Asia-Pacific freight capacity cargo is the shortage of capacity. cargo, saw international cargo accommodating demand with is falling least heavily, with a Typically, half of the cargo demand slide 19.3% year-on-year severely reduced capacity. If year-on-year decline of 34.1%. would be carried in the bellies in August, with the Association borders remain closed, travel Freight capacity has been of wide-body passenger aircraft of Asia Pacific Airlines (AAPA) remains curtailed and passenger cut by 50% in the Middle East, that usually operate on long-haul citing ongoing weakness in global fleets remain grounded, air 52.5% in Africa, 54.3% in services. Most of those markets trade flows. Freighter operations cargo’s ability to keep the Europe, North America 46.5% are still not open,” he said. in the region remained active, global economy moving will be and 55.4% in Latin America. IATA’s latest freight statistics, but significant reductions in challenged.” The conclusion of previous released in late September and passenger operations led to a Analyst CAPA said with the CAPA reports on the impact of covering August, underscored 33.4% year-on-year decline in peak season underway and severe the COVID-19 crisis on air cargo the fact improvement in the offered freight capacity. capacity constraints in place remains unchanged: Air cargo sector remains slow because of “Economic indicators shippers may look to alternatives revenue is more virus proof than such as ocean and rail to keep the air passengers, but cargo alone global economy moving. cannot save airlines. “The overall reduction in Nevertheless, airlines are freight capacity, plus much more scrambling to increase cargo robust demand for air cargo capacity, a sector AAPA director versus air passengers, has pushed general, Subhas Menon, has up cargo yield and load factor. predicted will become extremely This has the potential to offset important to carriers as they lower volumes and drive cargo recover from the crisis. Ascend by revenue to positive growth in Cirium head of market analysis,

18 / ORIENT AVIATION / NOVEMBER 2020 AIR CARGO

Chris Seymour, said the air freight the type and nine orders to date sector had just emerged from in 2020, Boeing has increased its worst year for traffic in a its production of the type and is decade, driven by weak global delivering 18-20 of the airplanes trade and a 3.3% fall in freight a year. FedEx is a key customer. tonne-kilometres (FTKs), when Boeing also is considering a the COVID-19 pandemic struck. possible re-engineered 767-X Underlying numbers hide using the 787’s GEnx engines, differing fortunes, he said. “The for the 2030s, in part driven by fleet of main deck freighters the need to meet new ICAO in service has increased by 65 environmental regulations.” aircraft since the start of the crisis Orders for conversions are and utilisation has gone up.” coming in regularly. Boeing has There was a slight decline announced a firm order, from in the main deck freighter jet stored for seven years, is being project is expected to be seriously an unidentified customer, for in-service fleet in February and reactivated,” Seymour said. considered until the late 2020s - two 737-800 Boeing Converted March followed by increases Not surprisingly, the business at the earliest. Freighters (BCF) and has each month since then. Forty five of converting passenger aircraft Seymour said the fleet of agreements to open additional additional aircraft were in service to freighters is booming, as intermediate sized freighters conversion lines in Guangzhou by late August compared with are plans by major aircraft numbered almost 600 at the end and Singapore to meet strong January 31 this year. manufacturers to produce new of 2019. “In the next 20 years, market demand. “In the high capacity, freighters. Boeing is looking at the opportunity exists to replace South Korea’s Asiana Airlines long-haul fleet, the 747 remains a new 777-X freighter based on more than 60% of that fleet of has converted three passenger the market leader, with a fleet the 777-8, which is predicted to A300s and B767s and grow it jets to cargo planes to offset its of 300 in August, an increase be popular for the replacement by a forecast 350 aircraft. The sharp decline in air travel demand. of 10. This includes delivery of of older B777Fs and B747-400Fs. 767-300F has an advantage over It has converted an A350-900 three new 747-8Fs, but also eight It is estimated to have a payload other freighters because it is very passenger jet and two 777-200ER -400Fs and an -200F coming capability similar to the 747-400F. much ‘right sized’ for integrator jets to cargo carriers, joining two out of storage, indicative of the Airbus may develop an and e-commerce demand,” he 777-200ERs already in service on short-term demand for lift. One A350 freighter, based either on said. Asian routes and an A350-900 747-400SF, which has been the -900 or -1000, but neither “With a backlog of 53 of flying to the U.S. ■ Industry shifting to post-COVID-19 survival strategies forward bookings increase

ndustry appraisal consultancy, and Russian markets. However, Aircraft being retired said. The European manufacturer IBA, reported at press time load factor remains depressed averaged an age of 20 years and is forecast to account for the global airline industry is and aircraft utilization on included the 747, 767-300ER, MD 68% of them. Boeing will lag shifting from managing the international flights is only 28% 80-MD90 and also the A380, behind, with 19% of global COVID-19 crisis to developing of pre-pandemic levels,” IBA’s 340-600 and 777-200LR younger delivery share, largely from the Istrategies for long-term survival. industry intelligence platform, wide-bodies. huge impact of the 737MAX Forward airline bookings InsightIQ, said. Aircraft values had suffered grounding on the company’s for next year were recovering Failed airlines, mainly due from an oversupply of airplanes production schedule. globally “partially bolstered by to the virus, had led to the exit in the depressed global industry Chinese and North American greater ease in securing [ticket of 1,489 aircraft from the global with values for the 737NG and carriers account for more half of refunds] along with the prospect airline fleet, but the numbers A320ceo varying by 20% from the approximately 800 MAXs of faster testing at airports” were reducing, the consultancy past levels. Younger types – grounded from March 2019 or leading to the potential to deliver said. A350, A320neo family, A330neo built but not delivered since then. higher passenger volumes, it said. “The rate of growth has and the 787 – were doing better IBA predicts the MAX will begin “Aircraft utilization on slowed considerably since July with a 10% drop in pricing. its return to service at scale from domestic flights has progressed with only nine airlines entering Deliveries from the major April to June next year, subject to slowly back to 60% of this position during this time OEMs, Airbus and Boeing, will the regulatory, production and pre-COVID-19 levels, led by a compared with 32 carriers from decline by more than 50%, to airline demand situations at the strong resurgence in the Chinese February to July this year,” it said. 715, this year against 2019, IBA time. ■

NOVEMBER 2020 / ORIENT AVIATION / 19 NEWS BACKGROUNDER

recently the national focus has shifted to cargo flights, but the SpiceJet’s foray into group said they were looking at increasing revenue from cargo before the pandemic,” said an air cargo paying off airline official. SpiceXpress aside, which also operates a drone division, the India’s second largest private airline, SpiceJet, is transforming parent carrier intends to move into an airport transport group, reports Anjuli Bhargava. beyond “pure aviation”. “We are relooking at our entire business with a critical lens and diversifying our revenue sources”, said SpiceJet chairman and managing fter this year’s director, Ajay Singh, who has COVID-19 induced been aggressive in pursuing lockdown crippled initiatives during the pandemic. global aviation and In due course, the verticals brought passenger will be independent revenue Atraffic to a near halt, Indian generating businesses, he airlines, like every airline in the has predicted. The group’s world, were confronted with a businesses range from bleak future. SpiceTechnic (defence), SpiceCare As the shock of the pandemic (air ambulance) and SpiceJet began to sink in across India, the Merchandise (E-commerce, retail country’s carriers, led by SpiceJet, & merchandise) to SpiceStar homed in on cargo to add cash Academy (aviation training). to their bottom lines. Fellow LCC, Recently, following final IndiGo, quickly followed suit as clearance from UK regulators, did several smaller carriers. SpiceJet announced it would Almost all Indian airlines launch three times a week Delhi also started doing Vande Bharat and Mumbai services to London transport and charter flights in the northern winter with to bring in much needed cash. wet-leased aircraft, a decision Vande Bharat, or Train 18, is many in Indian aviation describe a high speed electric train, as “suicidal”. developed and built in India and Singh has defended his launched last year. The fleet is decision and said a dedicated planned to expand to 44 trains in team at the airline had been the next two years. proving critical to the company’s no-brainer because a country as working on launching long-haul Many airlines in India used expanding air freight operations. big as ours needed a big cargo operations for close to two years. their existing fleets to transport “We did not start dedicated operator,” said the spokesman. On multiple occasions, SpiceJet cargo, but SpiceJet decided to cargo operations like some “The air freight operator has had applied for landing slots wet lease two aircraft. It is now carriers following the lockdown,” allowed the group to develop without success at Heathrow flying 13 cargo planes and is said a SpiceJet spokesman, the capability and experience to and other airports in the UK. The planning to add three more to “because the airline already had a provide door-to-door deliveries slots allotted to SpiceJet became its fleet, a gambit many in the dedicated cargo arm. SpiceXpress to more than 12,500 post codes available from September 1, 2020. industry feel is rash since wet has taken more than two years of across India.” “There was no rush from leasing aircraft is expensive and hard work for it to be where it is The SpiceJet subsidiary our side. We took our time. The not usually the best option for an today.” has invested in a logistics chain decision to launch operations airline. Its airline management had that has included setting up in December was based on SpiceJet said the cargo push “lots of doubts, apprehensions warehouses. “A lot of things thorough analysis. We have has paid off with revenues from and questions” about the viability we carry, like blood samples, chosen a time when we think air freight up 144% in the first of cargo operations when the need a temperature controlled demand will be the strongest,” quarter of 2020 over the same air freight carrier was launched. environment. Now we have that the SpiceJet spokesman said. months last year, with its two- “However, for SpiceJet this was facility in our planes and in our Watch this space to see how year-old cargo wing, SpiceXpress, a natural progression and a ground support vehicles. It is only SpiceJet’s latest gamble fares. ■

20 / ORIENT AVIATION / NOVEMBER 2020 TECHNOLOGY

Hurdles ahead to achieve hydrogen powered aircraft

The spotlight is on research into emission-free propulsion systems for jet engines, such as electric power and hydrogen fuel. They will come, says one leading engineer, but not any time soon.

By associate editor and chief correspondent, Tom Ballanytne

ratt & Whitney commercial scale using motors senior vice president to provide augmentation to the engineering, Geoff engine spools. But our designs Hunt, is just as excited in this area need to be flexible as everyone else about to allow for the fact that battery Pfuture propulsion technologies technology may accelerate that will ultimately take airlines and over the 25-year life of an into a carbon free future. But he engine those improvements also is a realist who knows before will possibly be available as jets can be fueled by hydrogen drop-in replacements. Adaptable or driven by electricity, there is a architecture is going to be very mountain to climb. important. Regardless of the “However we look at more hurdles we must be pursuing radical propulsion technology those technologies in a such as electric, hybrid electric large commercial segment. or hydrogen fuel, it’s going to be Developments are first going to at least 15 years before we see aircraft, a 62-year-old, hydrogen-powered jet engine in be seen in the general aviation them in large commercial aircraft, six-passenger DHC-2 de Havilland the 1950s. You could argue that and regional space where maybe longer,” he said during Beaver seaplane retrofitted with electric starter generators on investments and scale are more a panel session at the recent Air a 750hp electric motor, flew in aircraft like the B787 represent manageable,” he said. Transport Action Group’s (ATAG) Canada. a toe in the water of a hybrid- In the meantime, said Hunt, 2020 Global Sustainable Aviation Hunt said the more electric architecture. the continued focus on driving Forum - Green Recovery, a challenging question about “It has taken decades to efficiency that’s brought us 85% virtual, on-line event that brought hydrogen is the infrastructure establish the excellent standards overall improvement since the together representatives from all level required to make it happen. of safety, reliability and life-cycle start of the jet age must continue. sectors of the industry to discuss “If we look at running just 10% cost modern propulsion systems “The second critical element aviation sustainability beyond of the aircraft fleet that operated provide and the regulatory is sustainable aviation fuels. COVID-19. in 2019 it would require 90% of system that governs them. It’s Whatever scenario you look He was speaking just days the hydrogen produced globally one thing to use hydrogen or at towards 2050 these are after Airbus revealed three that year. And 95% of that was hybrid electric to generate thrust, core elements of that strategy concepts for the world’s first produced from methane, which it’s another to do it in a way that and P&W, along with other zero-emission commercial has its own issues from a climate assures no compromise in those OEMs (Original Equipment aircraft, which could enter perspective. The challenge areas.” Manufacturers), has approved service by 2035. Rather than is to convert that hydrogen On the hybrid-electric a range of sustainable aviation using traditional jet fuel all three production to a green source and side Hunt said “one lesson we fuels for use in our engines on designs rely on hydrogen as their scale the volume and distribution can take from other industries a drop-in basis. However, the primary fuel source alongside to supply not just the aviation is the pace of change in this challenge is for energy providers batteries to power hybrid sector but for other sectors that area can be hard to predict. to scale production from levels of engines. In another development are starting to pivot towards that Today we have the technology about 40,000 tonnes to the 500 late last year the world’s first fuel source,” he said. to demonstrate what I could million tonnes that are likely to be electric-powered commercial “At P&W we ran our first consider a mild hybrid on a large needed by 2050.” ■

NOVEMBER 2020 / ORIENT AVIATION / 21 INDUSTRY ADDENDUM FINANCE MROS OEMS TECHNOLOGY TRAINING

SUSTAINABILITY based on a multi-year agreement. Neste is expanding a facility in Singapore that will allow it to increase current annual production All Nippon Airways (ANA) of 100,000 tons of SAF. With possible additional investment in its Rotterdam and Neste commit to refinery, Neste said it could produce 1.5 enduring sustainable million tons of SAF a year by 2023. aviation fuel deal Neste, listed on Nasdaq Helsinki, refines waste, residues and innovative raw materials Japan’s All Nippon Airways has strengthened into renewable fuels and sustainable feed action in reducing greenhouse gases from stocks. It also is introducing renewable and aviation with a new agreement to buy recycled raw materials such as waste plastics Meant to return Japanese aviation sustainable aviation fuel (SAF) from Neste, refinery materials. ■ manufacturing to the global stage when it was the world’s leading producer of both SAF and launched in 2008, the SpaceJet has suffered renewable diesel. several delays in achieving entry-into-service. ANA said last month it had established MANUFACTURING It latest date for delivery was next year. a procurement supply chain with Neste and MHI has set a goal of 12% Return-on- secured the support of Japanese trading Equity for the 88-92 seat aircraft by March giant, Itouchu Corporation, in the venture. Mitsubishi retreats from 31, 2024. ■ The partnership will make ANA the SpaceJet program after first airline to fly with SAF out of Japan. The carrier is the first Asian airline to use Neste’s buying Bombardier’s TECHNOLOGY SAF. Operations with SAF flights began from regional jet business in 2019 Tokyo’s Haneda and Narita airports last month. After more than a decade of development Sabre and Google create ANA executive vice president and an investment of US$10 billion, Japan’s Artificial Intelligence travel overseeing procurement, Yutaka Ito, national SpaceJet, or M90, has been said: “We are pleased to report, according suspended, its backer, Mitsubishi Heavy platform to the International Sustainability and Industries (MHI) has announced. Carbon Certification, Neste My Sustainable In June last year, MHI bought Canada’s In an industry first, travel technology Aviation fuel supplied in Tokyo provides Bombardier’s regional jet division, which had provider, Sabre, and search engine, Google, approximately 90% greenhouse gas emission developed the CSeries regional aircraft. The are developing an Artificial Intelligence reduction through its life cycle and in its neat Japanese conglomerate paid US$550 million platform, Sabre Travel AI. form compared with fossil jet fuels.” for the OEM and also accepted liabilities of “With the creation of Sabre Travel AI, Neste executive vice president for another $200 million. we are rebuilding our platform on cloud data renewable aviation, Thorsten Lange, said “We will temporarily pause while driven technology that can be integrated into the company recognized the major role making preparations for the resumption existing and future Sabre products,” Sabre SAF has to play in reducing greenhouse gas of the business, MHI chief executive, Seiji Labs president, Sundar Narasimhan, said. emissions, both in the short and long terms. Izumisawa, said on October 29. He insisted “We are combining Google Cloud’s “With this new collaboration, we are enabling SpaceJet remained a long-term goal for the infrastructure, AI and machine learning the supply of [our] SAF for the first time in aerospace to energy and defence group. capabilities with Sabre’s deep travel domain Asia,” he said. “How we will take the business forward will knowledge to create not next but third The partners said last month they would depend on market conditions,” he said in a generation solutions we believe are smarter, enhance their collaboration after 2023, Financial Times report. faster and more cost-effective.” The company plans to bring the new customer experience solutions to the market next year. It has been working with Google Cloud since January 2019. “Sabre Travel AI perfectly represents Google Cloud’s strategic vision to partner deeply with thought leaders in industry verticals to utilize our innovative technologies to transform and create industry firsts,” Google Cloud president, Rob Enslin, said. “Today’s announcement is what we hope will be the first of many concepts generated by our partnership.” ■

22 / ORIENT AVIATION / NOVEMBER 2020 ADVERTISING ENQUIRIES TO ORIENT AVIATION MEDIA GROUP SALES DIRECTORS: The Americas / Canada Europe, the Middle East & the Asia-Pacific RAY BARNES DEFNE ALPAY E-mail: [email protected] E-mail: [email protected] T: +1 (434) 770 4108 T: +44 7712 829859

ORIENT AVIATION MEDIA GROUP: ORIENT AVIATION • E-ORIENT AVIATION • ORIENT AVIATION DAILY DIGEST • WWW.ORIENTAVIATION.COM