WHAT MAKES SIA TICK? ‘We recognised if we were to grow and •Asiana Airlines re-invents itself either become or remain a number one thanks to the Asian recession airline we had to have the best’ — SIA chief executive •Asian nations consider U.S. Dr Cheong Choong Kong plurilateral air rights deal •Leasing: special report NEW! AIR CARGO FOCUS every issue COVER STORY N E W S Quick merger success for China Southern; China Northern next? 10 WHAT MAKES Philippines bows to economic pressures, Taiwan flights resume 10 SIA awards Rolls-Royce A3XX engine contract 10 SIA TICK Page 18 New boss for Air Niugini 11 Garuda to lease seven B737s as passenger demand grows 12 No magic formula, Cathay to invest US$256 million in e-business 14 says airline chief Dr Cheong Asian countries in plurilateral air treaty talks with U.S. 24 How Asiana re-invented itself to combat Asian crisis 28 China helping to debunk the RJ myth 42 Business digest 46 SPECIAL REPORTS Leasing in the Asia-Pacific 29 Air freight focus: New series. Six page supplement 35 WHAT MAKES C O M M E N T SIA TICK? Inside China by Jonathan Sharp 34 ‘We recognised if we were to grow and •Asiana Airlines re-invents itself either become or remain a number one thanks to the Asian recession airline we had to have the best’ — SIA chief executive •Asian nations consider U.S. Dr Cheong Choong Kong Behind the Cockpit Door by The Captain 43 plurilateral air rights deal •Leasing: special report Turbulence by Tom Ballantyne 52 NEW! AIR CARGO FOCUS every issue I N F L I G H T A S I A A 16-page pull-out dedicated to onboard services and technology. In this issue: Inside the Airbus A3XX dream cabin; Malaysia Airlines to save 33% on cabin crew training time; Inflight banking? It’s closer than you think; Electronic chess sets add to PEDs safety concerns; Network: news and people moves. PUBLISHER ADVERTISING Wilson Press Ltd Hong Kong & China: Asia : Association of Asia Pacific Airlines GPO Box 11435 Hong Kong Jonathan Sharp, Wellington Ng Wilson Press Ltd Secretariat Tel: Editorial (852) 2893 3676 Tel: (852) 2504 3995 Christine McGee Suite 9.01, 9/F, Fax: Editorial (852) 2892 2846 Tel: (852) 2893 3676 Kompleks Antarabangsa, E-mail: [email protected] Photographers Fax: (852) 2892 2846 Jalan Sultan Ismail, Andrew Hunt (chief photographer), 50250 Kuala Lumpur, Malaysia. Publisher and Managing Editor Rob Finlayson, Hiro Murai The Americas / Canada : Director General: Richard Stirland Barry Grindrod Robyn Tucker International Marketing Commercial Director: Carlos Chua Design & Production Robyn Tucker Technical Director: Leroy Keith Joint Publisher Ü Design + Production Tel: (1-441) 295 8200 Tel: (603) 245 5600 Christine McGee Fax: (1-441) 295 8210 Fax: (603) 245 7500 Colour Separations Chief Correspondent Twinstar Graphic Arts Co. Europe : Published 10 times a year Tom Ballantyne REM International February, March, April, May, June, Tel: (612) 9638 6895 Printing Stephane de Remusat July/August, September, October, Fax: (612) 9684 2776 Lammar Offset Tel: (33 5) 34 27 01 30 November and December/January. Printing Company Ltd Fax: (33 5) 34 27 01 31 © All rights reserved Special Correspondent Wilson Press Ltd, Hong Kong, 2000. Patrick Garrett Distributed by Wilson Press Ltd The views expressed in this magazine are not necessarily those of the Association of Asia Pacific Airlines. November 2000 | Orient Aviation | 5 PUBLISHER’S LETTER A RIGHT ROYAL AIRLINE o airline drives a harder bargain than Singapore Airlines (SIA) But what can be staid about buying 49% of Virgin Atlantic Airways suppliers will tell you. But what you see is what you get with or working its slow way to 25% of a merged Air New Zealand and Ansett NSIA. Hard and demanding on the one hand, but fair and Australia? Is it dull to try and set up an airline in India, fail and then try completely above board on the other, they say. and buy into the market again via a privatised national company or now Profit margins may be small they claim, but all of them want des- maybe Air India? perately to be on SIA’s shopping list. It’s the ‘royal’ seal of approval in the And there is certainly nothing routine about splashing out US$9.9 business. billion for 25 A3XXs and six Boeing B747-400 freighters in recent weeks. It’s incredible how an airline from an island republic of four million There is also another dimension to SIA’s success, which is important people has, in just 28 years, become one of the most influential – and for the region. Along with airlines like Cathay Pacific Airways and other profitable – airlines in the world. airline leaders it has helped raise the bar in airline standards world-wide. Just what makes this proud airline tick, we ask in our cover story? In particular, inflight service in Asia, for which SIA has become a byword, Chief executive Dr Cheong Choong Kong, who joined SIA two years after is a yardstick by which all other airlines are judged today. SIA, no doubt, its launch, explained modestly to Tom Ballantyne that “we stay with the will keep pushing that bar higher. basics of management, time-honoured basics”. There is no magic formula, Together these SIA elements have produced an awesome airline, even he said. to its deadliest rivals. We expect they will continue to surprise us. Analysts say what sets SIA apart from most of its rivals is long-term planning, solid research and a knack for taking a calculated risk at just the right time. Such an extroverted corporate strategy surprises many outsiders moulded on an international image of Singapore and its companies as staid, conservative and afraid to say boo without permission from the BARRY GRINDROD central government. Publisher/Managing Editor The Association of Asia Pacific Airlines members and contact list: Air New Zealand Dragonair Philippine Airlines Managing Director, Mr Gary Toomey Chief Executive Officer, Mr Stanley Hui Chairman, Mr Lucio Tan GM Govt & International Affairs, Corporate Communication Manager, VP Corporate Communications, Mr Graeme McDowall Ms Laura Crampton Mr Rolando Estabilio Tel: (649) 366 2605 Fax: (649) 309 4134 Tel: (852) 3193 3193 Fax: (852) 3193 3194 Tel: (632) 817 1234 Fax: (632) 817 8689 All Nippon Airways EVA Air Qantas Airways President and CEO, Mr Kichisaburo Nomura President, Mr Frank Hsu Managing Director, Mr James Strong Director, Public Relations, Mr Koji Ohno Deputy Senior Vice President, Mr K. W. Nieh Director of Public Affairs, TBA Tel: (81 3) 5756 5675 Fax: (81 3) 5756 5679 Tel: (8862) 8500 2585 Fax: (8862) 2501 7599 Tel: (612) 9691 3760 Fax: (612) 9691 4187 Ansett Australia Garuda Indonesia Royal Brunei Airlines General Manager International, President, Mr Abdulgani Chairman, Dato Paduka Awang Haji Alimin Mr Gary Kingshott VP Corporate Affairs, Mr Pujobroto Bin Haji Abdul Wahab Tel: (631) 9623 3471 Fax: (613) 9623 3663 Tel: (6221) 380 0592 Fax: (6221) 368 031 Tel: (673 2) 343 368 Fax: (673 2) 343 335 Asiana Airlines Japan Airlines Singapore Airlines President, Mr Park Sam Koo President, Mr Isao Kaneko Deputy Chairman and CEO, Managing Director, PR, Mr Hong Lae Kim Director, Public Relations, Mr Geoffrey Tudor Dr Cheong Choong Kong Tel: (822) 758 8161 Fax: (822) 758 8008 Tel: (813) 5460 3109 Fax: (813) 5460 5910 VP Public Affairs, Mr Rick Clements Tel: (65) 541 4030 Fax: (65) 545 6083 Cathay Pacific Airways Korean Air Chief Executive Officer, Mr David Turnbull President and CEO, Mr Shim Yi Taek Thai Airways International Corporate Communications General Manager, VP Public Relations, Mr Seung Jae Noh President, Mr Bhisit Kuslasayanon Mr Alan Wong Tel: (822) 656 7092 Fax: (822) 656 7288/89 Director, PR, Mrs Sunathee Isvarphornchai Tel: (852) 2747 8868 Fax: (852) 2810 6563 Tel: (662) 513 3364 Fax: (662) 545 3891 Malaysia Airlines China Airlines Chairman, Tan Sri Tajudin Ramli Vietnam Airlines President, Ms Christine Tsung Tsai-yi Head of Industry Affairs, President and CEO, Nguyen Xuan Hien Director, Public Relations, Mr Scott Shih Ms R. Nordiana Zainal Shah Dep Director, Corp Affairs, Nguyen Huy Hieu Tel: (8862) 2514 5750 Fax: (8862) 2514 5754 Tel: (603) 2165 5154 Fax: (603) 2163 3178 Tel: (84-4) 873 0928 Fax: (84-4) 827 2291 November 2000 | Orient Aviation | DI A RY PERSPECTIVE OMPROMISE: The national govern is replacing local civil servant, Billy Lam, ment news agency of Malaysia re with new chief executive, David Pang, an Cported on October 19 that the govern- engineer and former chairman of Greater ment may be prepared to relinquish its golden China Dow Chemicals, effective on January share in national flag carrier, Malaysia Airlines 1. At the same time Fung was preparing to (MAS), if its withdrawal would help finan- announce the winner of a tender process to cially precarious MAS find partners willing to author a Strategic Overview for Major Airport invest equity in the airline. The golden share Development Report in late October. A third gives the national government power to veto competitive cargo terminal is in the offing as decisions that influence strategy and owner- is a dedicated Cathay Pacific Airways wing ship of MAS. Malaysian transport minister, Dr at the 30-month-old island airport. Earlier in Ling Liong Sik, said: “If the golden share is a the year, Fung brought in ex-Schiphol Airport hindrance to the continued development of senior executive, Hans Bakkers, as commercial MAS, and if it discourages foreign investment, Angel Air president, Somchai director. then we may have to think it over again.” Bencharongkul: His airline is accused of Following the minister’s statment MAS shares issuing bad cheques NO SHAME: After taking advice from a rose as much as 9.1%, its biggest one-day gain Zhuhai Air Show organiser about the best ho- in almost five months.