Vol. 26 No. 10 December 2019-January 2020 orientaviation.com ORIENT AVIATION PERSON OF THE YEAR 2019 AND LIFETIME ACHIEVEMENT AWARD WINNER TONY FERNANDES Co-founder and CEO AirAsia Group AIRASIA GROUP CEO, TONY FERNANDES, IS TRANSFORMING THE AIRLINE GROUP INTO “THE AMAZON OF ASIAN AVIATION” Crackdown necessary on More profitable days ahead Qantas postpones transport of counterfeit for Asia-Pacific airlines reports Project Sunrise lithium battery cargo global airline body decision to 2020 THERE IS NO COMPARISON. NO EQUAL. THERE IS ONLY ONE. THE COMMERCIAL JET ENGINE IN A LEAGUE OF ITS OWN. Powered by an industry‑first geared architecture — and more than 40 other groundbreaking innovations — the Pratt & Whitney GTF™ is unlike any engine that’s come before it. EXPLORE THE FUTURE OF FLIGHT AT PW.UTC.COM PW_CE_GTF_OrientAviation.indd 1 11/6/19 12:44 PM Client: Pratt & Whitney - Commercial Engines Ad Title: There is no comparison. Publication: Orient Aviation - Dec./Jan. Trim: 202 x 273 mm • Bleed: 212 x 283 mm • Live: 182 x 253 mm CONTENTS Volume 26, Issue 10 COVER STORY 18 Orient Aviation 2019 Person of the Year and ORIENT AVIATION MEDIA GROUP Lifetime achievement 17/F Hang Wai Commercial Building, 231-233 Queen’s Road East, award recipient, Wanchai, Hong Kong Editorial (852) 2865 1013 Tony Fernandes. E-mail: [email protected] Website: www.orientaviation.com The AirAsia Group CEO Mailing address: GPO Box 11435 Hong Kong is transforming the airline company into “the Amazon Publisher & Editor-in-Chief of aviation in Asia” Christine McGee E-mail: [email protected] Associate Editor & Chief Correspondent Tom Ballantyne Tel: (612) 9638 6895 Fax: (612) 9684 2776 E-mail: [email protected] COMMENT 24 Association of Asia Pacific Airlines names SIA’s Asia Editor 5 Increased profits for Asia-Pacific carriers ahead Subhas Menon as new director general Will Horton Tel: (852) 2865 1013 24 Getting to grips with unruly passengers E-mail: [email protected] ADDENDUM 25 Emirates president demands 777X be put 6 Cathay Pacific to cut capacity as civil unrest through “hell on earth” in certification process North Asia Correspondent Geoffrey Tudor continues in its home hub 25 Airbus topped order table at Dubai Airshow, but Tel: (813) 3373 8368 7 Citation for Orient Aviation’s 2019 Person of the Boeing signed new customers for the MAX E-mail: [email protected] Year, AirAsia’s Tony Fernandes Photographers 2019 YEAR IN REVIEW Rob Finlayson, Graham Uden, NEWS BACKGROUNDERS 12 Major leadership shifts at region’s carriers Ryan Peters 8 Air passenger and cargo markets will improve in Chief Designer 2020 forecasts the International Air Transport Chan Ping Kwan Association Printing Printing Station(2008) ADMINISTRATION General Manager 14 Significant Asia-Pacific airline decisions of the Shirley Ho year E-mail: [email protected] 15 Mixed fortunes in Asia’s fastest growing airline 9 Global airline lobby group urges a crackdown markets ADVERTISING on air transport of counterfeit or undeclared 16 Breathtaking changes confront MRO Lithium batteries Asia-Pacific, Europe & Middle East 9 Airline industry’s gender balance campaign INDUSTRY ADDENDUM Christine McGee attracts 59 airline members in three months 26 SITA 2019 China IT Insights reports fast take Tel: (852) 6438 3379 E-mail: [email protected] 10 Qantas selects A350-1000 as preferred Project up of Artificial Intelligence and automation at Sunrise aircraft Mainland airports The Americas / Canada 26 Australia’s Perth Airport extends Amadeus Barnes Media Associates relationship with contract to upgrade automated Ray Barnes Tel: (1 434) 770 4108 passenger processing Fax: (1 434) 927 5101 26 GKN Aerospace invests US$10 million in Pune that E-mail: [email protected] will create 800 jobs in five years [email protected] 26 HAECO unit and GA Telesis forge aircraft teardown partnership Follow us on Twitter @orientaviation 26 Aircraft seat manufacturer MRO, Ipeco, expands 23 Wanted: Asian airport and ATM building binge to Beijing DECEMBER 2019-JANUARY 2020 / ORIENT AVIATION / 3 LEAP-1A LEAP -1B ENGINES AVAILABLE NOW Available for short- or long-term lease and “pooling-like” preferred access. [email protected] www.willislease.com +1 561.349.8950 COMMENT Profits up for 2020 predicts IATA The International Air Transport Association’s (IATA) somewhat of IATA’s almost 300 strong airline members. unexpected prediction, announced at press time, that the “There is a long tail of airlines barely breaking even and a world’s airlines will collectively make more money in 2020 group making significant losses. For this long tail of airlines, than in 2019 was certainly welcome. IATA forecasts a net performance has not improved in the past decade. This is the profit of US$29.3 billion for the global airline industry next reason we have seen a series of airline failures in the last two year, up from $25.9 billion in 2019. years, despite relatively good financial results at the aggregate For the Asia-Pacific specifically, the news was even better. industry level,” said IATA’s chief economist, Brian Pearce. The region’s airlines will report a net profit of $6 billion for the “There is work to be done to move the industry to a more full 2020 year against a profit of $4.9 billion in 2019. Given broadly financially sustainable position.” global economies remain fragile, social unrest is rife in many Pearce is right. The vast majority of the world’s airlines countries, trade disputes abound and severe and extreme need to make their operations financially sustainable. weather events are on the increase, forecasts are extremely Observers of the Asia-Pacific industry would have no problem difficult to make. identifying carriers that are part of that long tail. So the optimism engendered by IATA’s projections for next For some of the region’s airlines, obstacles to greater year should be considered in context and tempered by several profitability will be temporary. A case in point is Cathay Pacific factors. Firstly, the forecast is supported by a belief there will Airways. Its declining passenger demand is a result of civil be a “truce” in the U.S./Sino trade war in the run up to the U.S. unrest in its home hub in Hong Kong, a situation that is out of presidential election next November. its control. Several airlines in China and elsewhere in the region Given the roller-coaster nature of the disagreement, there have been hit by the grounding of the 737 MAX, country-to- is no guarantee of a temporary slowdown in the tit-for-tat tariff country political disputes and foreign currency fluctuations. war. It also is expected the price of oil will be stable and even In the coming year, it is expected the volatile operating drop. Again, hardly a sure bet. conditions for Asia-Pacific airlines will continue, whatever And then there are ramifications to consider following the forecasts may be. Longer-term, the future of the region’s IATA’s news that profits collectively produced by the airline carriers is bright, but they would do well to prepare for another industry in the last ten years were generated by only about 30 tough 12 months despite IATA’s positive predictions. ■ TOM BALLANTYNE Associate editor and chief correspondent Orient Aviation Media Group The most trusted source of Asia-Pacific commercial aviation news and analysis ORIENT AVIATION ORIENT AVIATION CHINA “It has established itself as the primary source of information on industry topics in the Asia-Pacific region” DECEMBER 2019-JANUARY 2020 / ORIENT AVIATION / 5 ADDENDUM Cathay Pacific cuts capacity as passenger traffic tumbles Cathay Pacific Airways has competition, has meant overall revised downwards its planned Looking forward, we continue to see yield has remained under capacity increase for 2020 as a significant shortfall in inbound Hong Kong significant pressure,” he said. passenger numbers declined for advance bookings, particularly from The group’s regional routes, the fourth month in November. mainland China and other regional markets, in particular mainland China and At press time, Hong Kong had compared with the same snapshot last year Northeast Asia, were continuing entered its seventh month of civil to experience weak demand for protests and unrest, a situation Ronald Lam travel into Hong Kong. Travel that particularly has impacted the Cathay Pacific Group chief customer and commercial officer sentiment also “was soft” on travel and hospitality industries of routes to and from the U.S. the Special Administrative Region. company statement. weak. Our inbound Hong Kong before Thanksgiving week, a “In light of the immediate In November, Cathay Pacific traffic dropped 46% compared traditionally strong period for commercial challenges we are and Cathay Dragon carried with the same period in 2018 – a premium class travel, Lam said. facing, we have reluctantly 2,623,764 passengers, 9% fewer further slowdown from the 35% “There were a few bright made the decision to reduce our than in the same month a year drop in October.” spots in the network such as our seat capacity in 2020 by 1.4% ago. Passenger load factor was Outbound traffic was down India routes, which remained year-on-year as opposed to our 80.1% for the month, a drop 8% against the same time last robust and generated good original plan of 3.1% growth, of 3.2 percentage points over year – a slight improvement over demand between India and meaning that for the first time in a November 2018. previous months, Lam said. North America. Europe to long while our airlines will reduce Lam said: “November “Our increasing reliance Southwest Pacific, an important in size,” Cathay Pacific Group continued to be very challenging on transit traffic through Hong transit stream for the airline’s chief customer and commercial for both Cathay Pacific and Hong Kong, which has been less network, also remained healthy,” officer, Ronald Lam, said in a Kong with sentiment for travel still impacted, together with intense he said.