PUBLISHER Wilson Press Ltd VOL. 10 NO. 10 SEPTEMBER 2003 GPO Box 11435 Hong Kong Tel: Editorial (852) 2893 3676 Fax: Editorial (852) 2892 2846 E-mail: [email protected] Web Site: www.orientaviation.com Chief Executive and Editor-in-Chief Barry Grindrod E-mail: [email protected] Publisher Christine McGee E-mail: [email protected] Chief Correspondent COVER STORY Tom Ballantyne Tel: (612) 9638 6895 Fax: (612) 9684 2776 E-mail: [email protected] China CLUB Page 12 Melody Su Tel: (852) 2893 3676 E-mail: [email protected] Japan and Korea BENEFITS Daniel Baron Tel: (813) 3406 4694 E-mail: [email protected] Alliances prove Photographers their worth Patrick Dunne (chief photographer), Rob Finlayson, Andrew Hunt, Hiro Murai in times of crisis Design & Production ü Design + Production Colour Separations Twinstar Graphic Arts Co. Printing Hop Sze Printing Company Ltd ADVERTISING South East Asia and Pacific NEWS Shirley Ho Tel: (852) 2865 1013 THAI confirms US$1.4 billion fleet upgrade 6 Fax: (852) 2865 3966 Hong Kong Airport plans to privatise; in joint venture talks with Shenzhen 6 E-mail: [email protected] Four new low-cost airlines planned in Asia 6 The Americas/Canada IATA supports Qantas’ Air New Zealand buy-in 7 Barnes Media Associates Mid-year traffic surge for Asia-Pacific carriers 8 Ray Barnes Tel: (1) 434 927 5122 SARS has devastating impact on Cathay Pacific’s bottom line 10 Fax: (1) 434 927 5101 First quarter loss for SIA Group 10 E-mail: [email protected] Airservices Australia leading push to rationalise air traffic services 16 Europe Bombing puts Indonesian carriers under extra pressure 18 REM International New look Lao Airlines enters the jet age 24 Stephane de Remusat Tel: (33 5) 34 27 01 30 Fax: (33 5) 34 27 01 31 EXECUTIVE INTERVIEWS E-mail: [email protected] As their western counterparts thrive, the presidents of two of Japan’s New Media & Circulation Manager low-cost airlines outline their struggle for survival 20 Leona Wong Wing Lam Tel: (852) 2865 1013 E-mail: [email protected] FEATURE Mercy missions big business for the flying doctors 28 Association of Asia Pacific Airlines Secretariat Suite 9.01, 9/F, SPECIAL REPORT – AIRPORTS Kompleks Antarabangsa, It’s cooperation and competition for airports in China’s Pearl River Delta 30 Jalan Sultan Ismail, Countdown to opening of new Guangzhou Airport 36 50250 Kuala Lumpur, Malaysia. Director General: Richard Stirland No-shows a problem for Noto 38 Commercial Director: Carlos Chua Asian airports could be first with one-stop check-in 40 Technical Director: Leroy Keith Tel: (603) 2145 5600 Fax: (603) 2145 7500 HELICOPTERS E-mail: [email protected] Sikorsky strengthens its presence in Australia 42 Published 10 times a year February, March, April, May, June, COMMUTER AVIATION July/August, September, October, New Hong Kong carrier takes off 42 November and December/January. © All rights reserved Wilson Press Ltd, Hong Kong, 2003. REGULAR FEATURES Comment 5 The views expressed in this magazine are not necessarily those of the Association of Asia Pacific Airlines. Business Digest 43 September 2003, Orient Aviation 3 COMMENT ALLIANCES STEP UP TO THE MARK or Asian airlines a crisis is no longer something that SARS passed they helped spread the word that flying to Asia comes along every decade. It has become an ongoing was safe. state of affairs for airline managements. More importantly, alliances have matured through crisis, They must wonder what the next shock will be, moving from being mainly marketing tools to a more crucial where it will come from and how they will deal with role as a means of cutting bottom line costs. All alliances are F it. We may now be talking about recovery from the impact now tackling the serious issues of joint purchasing of high- of SARS, but the bombing last month of a five-star hotel in cost items. These include aircraft, fuel, information technology Jakarta reminds us there are other, ever-present threats to systems and co-operation on maintenance and spare parts. business stability. Asian airlines have achieved a great deal in recent years in Ravaged by SARS, regional operators not only have trimming expenses, but they know they have to do more. In the to nurse their way back to fiscal health, they have to do years ahead, the savings for alliance airlines in joint purchasing what senior industry bodies such as the International Air will be immense. Transport Association and the Association of Asia Pacific As with all opportunities, alliance membership is not for Airlines have been urging for months: find new ways of everyone, at least not at this stage. Indeed, it would likely be doing business. possible to achieve some of the same goals through a variety As our cover story this month shows, one key component in of bilateral co-operative agreements with airlines. that quest may be membership of a major global airline alliance. One suspects, however, that all major international airlines Often controversial, sometimes maligned, alliances appear to will ultimately align themselves with an alliance to take full have played a critical role in helping members confront the advantage of the cost saving and efficiency gains they can trauma of recent crises. bring. The airline groupings did not stem all the losses, but they allowed operators to react quickly, in co-operation with partners, to adjust capacity and networks and fine-tune them to meet precise levels of falling demand. Alliance members TOM BALLANTYNE were able to swap ideas and not face the shock alone. When Chief correspondent THE ASSOCIATION OF ASIA PACIFIC AIRLINES MEMBERS AND CONTACT LIST: Air New Zealand Dragonair Philippine Airlines Chief Executive, Mr Ralph Norris Chief Executive Officer, Mr Stanley Hui President, Mr Avelino Zapanta VP Public Affairs and Group Corporate Communication Manager, VP Corporate Communications, Communications, Mr Glen Sowry Mrs Laura Crampton Mr Rolando Estabilio Tel: (632) 817 1234 Fax: (632) 817 8689 Tel: (64 9) 336 2770 Fax: (64 9) 336 2759 Tel: (852) 3193 3193 Fax: (852) 3193 3194 Qantas Airways All Nippon Airways EVA Air Managing Director and CEO, President and CEO, Mr Yoji Ohashi President, Mr Steve Lin Mr Geoff Dixon Senior VP, Public Relations, Mr Koji Ohno Senior Vice President, Group General Manager Public Affairs, Tel: (81 3) 5756 5675 Fax: (81 3) 5756 5679 Mr K. W. Nieh Mr Michael Sharp Tel: (8862) 8500 2585 Fax: (8862) 2501 7599 Tel: (612) 9691 3760 Fax: (612) 9691 4187 Asiana Airlines President & Chief Executive, Garuda Indonesia Royal Brunei Airlines Chairman, Dato Paduka Haji Hazair Mr Park Chan-bup President, Mr Indra Setiawan Chief Executive, Mr Peter Foster Managing Director, PR, VP Corporate Affairs, Mr Pujobroto Tel: (673 2) 229 799 Fax: (673 2) 221 230 Mr Hong Lae Kim Tel: (6221) 380 0592 Fax: (6221) 368 031 Tel: (822) 758 8161 Fax: (822) 758 8008 Singapore Airlines Japan Airlines Chief Executive Officer, Cathay Pacific Airways President, Mr Isao Kaneko Mr Chew Choon Seng Chief Executive Officer, Mr David Turnbull Director, Public Relations, VP Public Affairs, Mr Rick Clements Corporate Communications General Mr Geoffrey Tudor Tel: (65) 6541 5880 Fax: (65) 6545 6083 Manager, Mr Alan Wong Tel: (813) 5460 3109 Fax: (813) 5460 5910 Tel: (852) 2747 8868 Fax: (852) 2810 6563 Thai Airways International President, Mr Kanok Abhiradee Korean Air Director, PR, China Airlines Chairman and CEO, Mr Yang Ho Cho Mrs Sunathee Isvarphornchai President, Mr Philip Hsing-Hsiung Wei Managing VP, Corporate Communications, Tel: (662) 513 3364 Fax: (662) 545 3891 VP, Corp Comms, Mr Roger Han Mr Jun Jip Choi Tel: (8862) 2514 5750 Fax: (8862) 2514 5754 Tel: (822) 656 7065 Fax: (822) 656 7288/89 Vietnam Airlines President and CEO, Malaysia Airlines Mr Nguyen Xuan Hien Chairman, Tan Sri Azizan Zainul Abidin Dep Director, Corp Affairs, Mr Nguyen Huy Hieu Tel: (603) 2165 5154 Fax: (603) 2163 3178 Tel: (84-4) 873 0928 Fax: (84-4) 827 2291 September 2003, Orient Aviation 5 NEWS REGIONAL ROUND-UP THAI CONFIRMS Tang’s announcement US$1.4 BILLION received widespread en- FLEET UPGRADE dorsement from airlines hai Airways Interna- and the chairman of the tional (THAI) received Airport Authority Hong T government approval Kong, Vic-tor Fung. Fung in August to buy eight new said privatisation “will bring Airbus aircraft and seven discipline” to the authority’s five-year-old B747s from U.S. operations. Chief executive Chapter 11 carrier, United of the authority, Dr. David Airlines. Pang, said privatisation gen- THAI president, Kanok erally takes about 18 months Abhiradee, said the order of preparation. was part of the airline’s five- year US$3.11 billion invest- Thai Airways International: fleet to be expanded to 92 planes ... JOINT VENTURE ment plan to expand the air- WITH SHENZHEN line’s fleet to 92 airplanes, to buy the planes from United istrative Region (HKSAR) AIRPORT MOOTED increase its weekly services because their aircraft and Henry Tang announced in Twenty four hours after by 154 flights worldwide by equipment are the same speci- August that Hong Kong In- the privatisation plans were 2007 and add 27 destinations fications as Thai Airways is ternational Airport would announced it was revealed to its network. THAI operates using,” said Abhiradee. be partly privatised with the the airport authority was seri- 825 services a week at present, Meanwhile, THAI is ex- IPO slated for a Hong Kong ously working on a proposal but the carrier would like to pected to announce its plans Stock Exchange listing in that would bring together the increase its direct flights to for the sale of 23% of the carri- 2004.