Routes News Magazine, Issue 2, 2014 by routesnewsmagazine

routesnews ISSUE 2 VOL.10, 2014

The world air service development magazine

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In it for the long-haul: AirAsia X’s Azran Osman-Rani

INTERVIEW: SriLankan’s Kapila Chandrasena

ANALYSIS:

Indonesian market

REPORT:

Chinese travel trends

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Airline:

Destination:

Update:

Airports:

View from top:

Hong Kong Express

Kuching & Sarawak

The Philippines

Macau & Delhi

PATA’s Martin Craigs

Foreword EDITORIAL Lucy Siebert, Acting Editor +61 432 770 828 lucy.siebert@routes-news.com Joe Bates, Group Editor +44 (0)208 831 7507 joe@aviationmedia.aero

Pressure on infrastructure is building as Asia-Pacific goes through a period of unprecedented air travel growth, writes Lucy Siebert ahead of Routes Asia.

SALES Rebecca Randall, Group Advertising Director +44 (0)208 831 7513 rebecca.randall@routes-news.com David McCauley, Advertising Manager +44 (0)208 831 7515 david.mccauley@routes-news.com

PRODUCTION Elaine Harris, Design & Production Manager elaine.harris@routes-news.com Andrew Montgomery, Creative Director andrew.montgomery@routes-news.com Mark Draper mark@aviationmedia.aero Website Jose Cuenca jose@aviationmedia.aero Erica Cooper erica@aviationmedia.aero

CONTRIBUTORS Martin Rivers Peta Tomlinson

PUBLISHER Jonathan Lee +44 (0)208 831 7563 jonathan@aviationmedia.aero Published by Aviation Business Media Ltd Sovereign House, 26-30 London Road, Twickenham, TW1 3RW, UK T: +44 (0)208 831 7500 F: +44 (0)208 831 7501 The opinions and views expressed in Routes News are those of the authors and do not necessarily reflect any policy or position of UBM Information Ltd or Aviation Business Media.

Printed in the UK by The Magazine Printing Company using only paper from FSC/PEFC suppliers www.magprint.co.uk

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When it comes to numbers, us media professionals like a big, shocking, headline-grabbing figure. You know, something that is easy to report and digest so we can get back to tweeting. Luckily, Boeing came up with just that sort of number just ahead of the Singapore Air Show when it said it expects nearly half of the world’s air traffic growth to be driven by the AsiaPacific region over the next 20 years. That will see the number of aircraft in the region tripling over the two decades, resulting in demand for nearly 13,000 more aircraft. Yes, you read that right: the region’s fleet is set to triple in 20 years! The demand is forecast to be so great that huge pressures will be felt throughout the industry – from pilots, crew, technical and maintenance staff right through to tarmac space and airport terminals. One airline boss who is excited about the growth prospects, but realistic about the challenges it will create, is our cover star, AirAsia X’s Azran Osman-Rani. With an IPO and a major aircraft order behind it, the Malaysian longhaul low-cost carrier is looking to ramp up and build scale in existing markets, while also taking a long-term view to future growth prospects, which could even include Europe and the US. You can read more about that on page 25.

But while Osman-Rani is bullish on growth in Asia-Pacific, he also raised concerns about airport infrastructure and capacity throughout the region during our conversation. It is a welldocumented problem – with even the mega hubs of Beijing, Singapore and Kuala Lumpur struggling to keep up with demand. Things get even more urgent when it comes to markets like the Philippines and Indonesia. These are among the fastestgrowing markets in terms of passenger numbers, but their airports are stretched and struggling to cope. Find out more about Indonesia’s infrastructure prospects on page 42. And if all the number crunching gets too much for you during Routes Asia and the Strategy Summit, take some time to explore charming Kuching. We have some suggestions of what to do, straight from Sarawak Tourism Authority’s CEO, Dato Rashid Khan, on page 22. If you aren’t joining us in Sarawak, we will keep you up to date on the latest event news with daily online news and email alerts, and via Twitter, of course.

Acting Editor Lucy Siebert

R™ is a registered Trade Mark of UBM Information Ltd and is used under licence. © Copyright 2014. The content of this publication is the copyright of UBM Information Ltd and shall not be copied or stored in digital format without the written permission of the Copyright holder. Content is correct at time of printing. UBM Information Ltd shall not be liable for any errors or omissions contained herein.

ROUTES NEWS 2, 2014

Contents

8 World news

19 Airport one2one

25 Local thinking

11 On the move 13 Future focused

Katie Bland is leading Routes into the next era of route development – she shares her vision for future events.

Darwin Airport was an award winner at last year’s Routes Marketing Awards. Routes News caught up with Jim Parashos, director commercial and aviation development.

20 X marks the spot

All Nippon Airways (ANA), vice president network planning, Mitsuo Tomita, on the carrier’s Tokyo plans.

AirAsia X is plotting its pan-Asian multi-base strategy, bolstered by a major aircraft order. CEO, Azran Osman-Rani, speaks with Lucy Siebert.

17 A route in focus

22 Island style

15 Airline one2one

Hainan Airlines’ executive director – US, Joel Chusid, on launching the first-ever direct link between Beijing and Boston.

Sarawak is pursuing a five-year air services development plan. Lucy Siebert spoke with tourism chief, Dato Rashid Khan.

All the latest news, views and developments from the global network planning community online. Plus exclusive airline and airport interviews.

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Malaysia Airlines is looking to strengthen its offering in Asia with more frequencies from Kuala Lumpur to domestic points, its network head tells Lucy Siebert.

27 Five-year plan

Sri Lanka has experienced a tourism boom since its civil war officially ended five years ago. Its flag carrier’s CEO, Kapila Chandrasena, outlines the plan for the next five years to Martin Rivers.

33 Island hopping

Hong Kong is proving to be one of the hottest low-cost airline markets in Asia. The deputy CEO of new low-cost carrier, Hong Kong Express Airways, Andrew Cowen, spoke to Richard Maslen.

36 Stake your claim

There is more than meets the eye to building sustainable new route cases for the growth markets of Asia and Africa – and airports can make the difference, writes Sabine Reim.

ROUTES NEWS 2, 2014

Contents

39 Made in China

The Chinese are consuming fewer luxury goods and services at home, but international travel is on the up, writes Dr Wolfgang Georg Arlt.

42 Indonesia’s roar!

Aviation growth rates in Indonesia are startling – Mark Clarkson takes a closer look at airline growth and airport constraints.

45 Steeley determination

49 Capital investment

47 Helping hand

52 Big winner

Bangladesh’s flag carrier has a new CEO, Kevin Steele, who is looking to a refreshed fleet and new long-haul routes for improved profitability, writes Richard Maslen.

Four months on from Typhoon Haiyan, Lucy Siebert spoke with the Philippines’ Department of Tourism’s Benito Bengzon Jr.

Delhi’s new Terminal 3 means the gateway is prepared to welcome new airlines and increased frequencies alike, CEO, I Prabhakara Rao, tells Shayan Mallick.

Macau is the biggest gambling market in the world. Peta Tomlinson finds out how the island’s airport is betting on the future.

54 Dream land

New Zealand’s tourist arrivals are on an upward trajectory, bolstered by a blockbuster film, new air services and increased capacity on key routes, writes Chris Beanland.

56 Events essentials

Download the free app View all the latest issues, just search for ‘Routes News’ in the Apple or Android app stores. routes-news.com/app

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Marseille is preparing to say ‘bonjour’ to more than 1,000 delegates at Routes Europe in April.

58 View from the top

Martin Craigs, CEO, Pacific Asia Travel Association (PATA).

ROUTES NEWS 2, 2014

World news

European links Etihad Regional, operated by Darwin Airline, is now flying four times a week between Geneva and Stuttgart. The service marked the first flight by the newly rebranded regional carrier, which is tasked with funnelling passengers to major European airports served by partner Etihad and its other partner airlines. At the launch of the route, Maurizio Merlo, CEO of Darwin Airline, said: “We are proud to be the first airline to offer a direct air link between Geneva and Stuttgart. The new route is the first after the rebranding of Darwin Airline and the 16th year-round destination on our network.” Merlo added the airline would also connect passengers with other Etihad partners, including airberlin and Air Serbia. With the new addition, Etihad Regional now offers year-round flights to 16 destinations in Europe using a fleet of 10 Saab 2000 turboprop aircraft. By mid 2014, this will more than double to 34 destinations.

Korean Air is preparing to launch new flights from Incheon to Houston in May. The flight will be operated four times a week with a B777-200 aircraft. John Jackson, Korean’s vice president of marketing for North and South America, described the carrier as “bullish” about the new route. ThaiAir Asia is pushing ahead with applying for its operating permits after being awarded its Air Operator’s Certificate. The airline has also appointed Nadda Buranasiri as its CEO. The airline is currently working on slots for its planned international routes, which are believed to include at least one to Australia and one to China.

ROUTES NEWS 2, 2014

Etihad Regional celebrated its first flight between Geneva and Stuttgart. From left: Joerg Im Wolde, director sales and marketing, Stuttgart Airport, and Mario Tesla, head of sales, Darwin Airline.

Durban in South Africa has landed a new airline, Khuphuka Kings Airways. The South African carrier, owned by Khuphuka Investments Holdings, will operate cargo flights from the coastal city to Lubumbashi, in the Democratic Republic of Congo, with stopovers at Ndola, Zambia. It plans to operate three cargo aircraft on the route, two ILyushin 76 and one Antonov- AN 12. Southwest Airlines is adding 15 new domestic services from Dallas Love Field. The airline will start five new routes on October 13, with an additional 10 following on November 2. This will bring Southwest’s network at Love

Field to 31 non-stop destinations. Previously the Wright Amendment limited Southwest Airlines’ non-stop services from Dallas Love Field to nine states including Texas. Turkey’s Pegasus Airlines will launch flights from Istanbul Sabiha Gökçen to Madrid and Frankfurt during March. Frankfurt is the airline’s seventh destination in Germany, while Madrid will become its second city in Spain, joining Barcelona, which was launched last year. Wizz Air plans to launch a new route from London Luton to Sibiu in Romania. The Central and Eastern European low-cost carrier said it plans to operate the new service from

June 14. Initially the route will be served twice a week and Sibiu becomes the sixth Romanian destination served from Luton airport. Tampa has landed its first direct flight to Seattle with a new Alaska Airlines service. The airline will operate a B737800 daily between the two cities. According to Tampa Airport, more than 160 passengers fly between the two cities daily. Norwegian is set to receive four additional Boeing 787-9 Dreamliners. The airline will lease the four aircraft from International Lease Finance Corporation (ILFC) and they are expected to join the fleet in 2017 and 2018.

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Virgin Atlantic drops Sydney Virgin Atlantic is discontinuing flights to Sydney, leaving British Airways as the only European carrier operating to Australia. Virgin Atlantic had operated from Hong Kong to Sydney since 2004, but said it will close the route in May, citing increasing costs and a challenging economic environment for the move. In a statement, the airline said the route was “no longer considered profitable”. “Despite the best efforts of our employees, external factors such as increasing costs and a weakening Australian dollar have affected our profitability,” said Craig Kreeger, Virgin Atlantic CEO.

“These are still difficult times for the airline industry and, as part of our strategy to operate more efficiently, we need to deploy our aircraft to routes with the right level of demand to be financially viable.” Virgin Atlantic is battling to improve its financial position and is focused on its joint venture with Delta Air Lines, particularly on transatlantic routes. It has also faced fierce competition in Australia from the big three Middle Eastern carriers, Emirates, Etihad and Qatar, all of which see Australia as a key market.

CHOSEN ONE

Air Arabia becomes designated Ras Al Khaimah airline.

COLOMBIAN LINK

Direct Heathrow flights with Avianca.

EMIRATES IN NIGERIA

New Abuja and Kano services.

MONGOLIAN FIRST

Hunnu Air is Paris-bound.

Take off

or not MALDIVES

AirAsia X drops Male. Virgin Atlantic will bid Sydney farewell in May.

WIZZ AIR

Suspends Boston plans.

Thai Dreamliner for Perth Thai Airways will take a Boeing 787 Dreamliner to Perth from later this year, replacing its current A330-200 operation. The flag carrier is due to receive its first B787 in the first quarter of this year and plans to start operating it to Western Australia from July 1. OAG Schedules Analyser shows the airline is also likely to operate a Dreamliner from Bangkok to Tokyo Haneda from August 1.

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Thai’s Dreamliners are configured in a two-class design with seating for 264 passengers. Thai has eight Dreamliners on order and all will be leased from International Lease Finance Corporation (ILFC). This includes six 787-8s due from this year (four in 2014 and two in 2015) and two of larger 787-9s, which will follow in 2017. It has also ordered 12 A350-900s and the two widebodied twin-engine types are expected to be used on routes within Asia and the Pacific.

RESTRUCTURING

Romania’s Carpatair reviews business.

RICHARD BRANSON

Furious over potential Qantas bailout.

ROUTES NEWS 2, 2014

On the

move Nigel Mayes is moving from Routes to join consultancy ASM as senior vice president consulting & product development. Both Routes and ASM are part of UBM Live. Routes is currently recruiting for a new head of content and industry relations. Christophe Viatte has joined airBaltic as chief commercial officer, responsible for the airline’s commercial strategy and managing all commercial departments. Viatte was previously executive director at Czech Airlines, where he headed network planning and revenue management. Ahmed Aly has landed the CEO job at Egypt’s Nile Air Airlines. Aly previously worked at Etihad Airways in network planning and strategy. Nile Air is an Egyptian, private, full-service carrier operating scheduled regional services from Cairo and Alexandria. Lufthansa has appointed Carsten Spohr as its new group CEO, starting on May 1. He currently heads up the business segment of Lufthansa Passenger Airlines and has worked in a number of senior positions, including as head of global partnerships and chairman of the airline’s cargo division.

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EasyJet has appointed Sophie Dekkers as its new director, UK market, responsible for the airline’s commercial and strategic direction in the UK. She will report to group commercial director, Cath Lynn, and replaces Paul Simmons who joined Flybe as chief commercial officer last year. Meanwhile, Anthony Drury has been appointed to the newly created role of director of business at the carrier. He will help to drive easyJet’s business strategy across Europe. He was previously vice president and general manager Northern Europe for American Express.

Trudy Carson has been appointed director, air service development at Metropolitan Nashville Airport Authority, which she joins from Tampa International Airport. Vishal Desai has been seconded from Qatar Airways to its new Saudi Arabian based carrier, Almaha Airways, as programme manager. He will work on implementing the new airline’s strategy and will support the CEO in designing the new company. Desai was previously lead business analyst – global alliance, corporate planning at Qatar Airways and also worked in a number of sales and network planning roles at Virgin Atlantic.

Manoj Papa has been appointed CEO of Air Seychelles, taking over from Cramer Ball who resigned from the role. Papa joins the Indian Ocean carrier from South African Airways where he was acting general manager: commercial and was part of the team developing the airline’s longterm turnaround strategy. He also worked at Etihad as vice president corporate strategy between 2007 and 2012. John O’Sullivan will lead Tourism Australia as its new managing director. He replaces Andrew McEvoy who is joining events and media company Fairfax. O’Sullivan joins from broadcaster Fox Sports where he is chief operating officer. He has also had senior roles at Events Queensland where he was chief executive and was part of the 2000 Olympic and Paralympic Organising Committee. Birgit Otto has been appointed the new executive vice president & chief operations officer for the Schiphol Group. Otto will take up the new role on September 1 and will replace Ad Rutten, who is retiring. Otto is currently the director of airport operations and has been with the group since 2001.

Manoj Papa

Christophe Viatte

Sophie Dekkers

Götz Ahmelmann will join Air Berlin as chief commercial officer in July. Ahmelmann was previously Lufthansa’s vice president of sales and services. He will head up sales and marketing within the Air Berlin group. Virgin Australia has named Gary Hammes as its new chief operating officer. He has started in the role, where he is responsible for the group’s operations, including ground handling, flight operations, line maintenance and engineering, as well as the safety, catering and network operations teams. The US national has held senior roles at World Airways, United Airlines and Northwest Airlines.

ROUTES NEWS 2, 2014

Future focused Katie Bland is leading Routes into the next era of route development – she shares her vision for future events. Congratulations on your new role as director of Routes – what are your main priorities? Improving customer insight and how we use customer feedback to shape our events and improve our attendees’ event experience; developing a focused and empowered team; and strengthening our presence in key growth markets including Asia and Latin America.

What changes will your customers be seeing at events and online? An enhanced event and online experience, which is a result of us listening to our customers and taking their guidance on where we should be focusing our efforts on improving and innovating.

Which event are you most excited about this year? I’m excited about all of them, but I am particularly looking forward to World Routes 2014 in Chicago.

Can you explain more about Routes acquiring the Network USA event? Given that Routes Americas will be going to US for the first time in 2015 when it’s hosted in Denver, we came to an agreement with Flightglobal to bring Network USA under the Routes umbrella.

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We agreed this would benefit the air service development community in the USA by creating one definitive event.

More tourism authorities and economic development agencies are attending Routes events – why? Feedback from our airline attendees indicates that tourism authorities, economic development agencies and destination stakeholders add huge value to their airport meetings at Routes through the provision of additional destination data and route marketing support ideas to support the route opportunity discussions. In 2013, participation from tourist authorities grew by 300% and we are expecting this growth to continue. These organisations play a bigger and bigger role in supporting their airports to attract air service to their destination.

What is your long-term vision for the Routes events? I would like to see the events continue to grow, with more airlines, more airports and stakeholders using Routes to negotiate air service and that we will continue to deliver fantastic event content. But the events will always remain totally focused on their core purpose, which is to facilitate the process of air service development.

What is the best part of working for an events business? The best thing about being part of UBM is the fact that we are part of a truly global business with infrastructure and colleagues spanning all continents – it gives us much scope to grow and improve Routes and what we offer to the Routes community.

If you didn’t work in aviation events, what would you be doing? When I was young, I wanted to be an interpreter.

Katie has almost 20 years’ experience in the events industry having worked for a range of exhibition and media organisations, including Emap, Informa, Reed and Montgomery Exhibitions. Joining Routes in 2005, Katie spent the first five years there leading the sales team followed by a move into her most recent role as future hosts director, where she was responsible for securing future hosts for nine annual events in the Routes and Airport Cities portfolios. She is based in Routes’ Manchester head office.

ROUTES NEWS 2, 2014

Airline one2one

All Nippon Airways (ANA), vice president network planning, Mitsuo Tomita, on the carrier’s Tokyo plans. Why was expanding at Haneda a priority for ANA? Haneda is the biggest airport in Japan and is ranked number four worldwide by passenger numbers. It is located just 20km away from downtown Tokyo, which is 20 minutes away by train – making it easily accessible from the metropolitan Tokyo area. ANA has the biggest domestic network at Haneda and expanding international routes there makes for simple and stress-free connections. As the biggest hub in Japan for connecting domestic destinations nationwide with international destinations, expanding there gives passengers more flight choices than ever before.

Which routes will you be operating from Haneda from spring? In March, new routes will be launched to: Heathrow; Paris; Munich; Jakarta and Manila, together with our brand new routes, Vancouver and Hanoi. These routes join ANA’s existing services from Haneda to: Frankfurt; Los Angeles; Honolulu; Singapore; Bangkok; Taipei; Shanghai; Hong Kong; Beijing and Seoul.

Vancouver will become your first Canadian destination – what made that city such a strong proposition for ANA? Vancouver is one of the top destinations for demand between Japan and North America. Business development in the

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growing resource sectors in Canada is also driving demand between Japan and Canada. Plus, ANA can now connect various Asian communities living in Vancouver to their home towns.

What are your plans for developing your operations at Narita? Narita is one of the main gateways to Asia and passengers can connect to Asian cities through our joint venture partners’ networks. Haneda’s slots for international routes is limited, so Narita will continue to play a central role as an international gateway to the world. We see different advantages for Haneda and Narita and we are capitalising on their respective strengths, which we call our dual-airport strategy. While slot expansion at Haneda will not happen in the foreseeable future, Narita continues to be our base for expanding our international network. The new route Narita to Düsseldorf is an example of this, while other services are also under careful discussion.

Why did you drop Narita–Heathrow? Heathrow is a very congested airport and it is remarkably difficult to set the schedule as we wish, even once we have a confirmed slot. As a result, ANA decided to focus on the Haneda route for traffic to London and to remain a codeshare partner with Virgin Atlantic at Narita.

How has the improvement in the Japanese economy impacted air travel? As an airline, we cannot ignore the impact of the weaker yen and increased fuel costs. However, the improved economy stimulates demand in Japan, for both business and leisure travel, and we expect that will result in numbers that are on track for revival.

How is tourism to Japan performing? The weaker yen, together with promotion by the Japanese government and initiatives like the deregulation of visas, means that inbound numbers are growing, especially from Asian countries such as Thailand, Singapore, Taiwan, Vietnam and Philippines.

How are you responding to the new LCCs entering the Japan market? As a full-service carrier, we distinguish ourselves from LCCs, as we operate a different business model. We keep improving our quality – not only our network but also safety and service. There are many people who choose to fly on airlines that provide high-quality service, despite the comparably high price. We are confident we will continue to be competitive in the market.

ROUTES NEWS 2, 2014

Beijing–Boston

A route

IN F

CUS

Hainan Airlines’ executive director US, Joel Chusid, on launching the first-ever direct link between Beijing and Boston. There has never been a direct flight between Boston and Beijing – why are you initiating the new service now? Boston has been on our radar even before we started serving the United States in 2008. It is the sixth largest US–China O&D market and the only one of the top 11 without non-stop service, which was also the case with Seattle at our US entry. But there was also demand based on travel itineraries, all of which required a stop on the way. With the arrival of our Boeing 787 Dreamliners starting last year, there was finally an aircraft capable of serving the Boston route. It will save travellers about six hours on each round trip.

What industries and sectors will drive, or support, traffic on the route? It’s well known that when airlines begin non-stop service on a route that has previously not been served, demand is stimulated. In this case, this will be good for both China and New England originating passengers. Note that I said New England, and not just Boston. This will be the first non-stop service from the region to Mainland China, so the market will grow and not just reallocate traffic from the routes currently used. Leisure, VFR, business and student travel will comprise the traffic mix. The numerous educational institutions already have ties, plus there are pharmaceutical, biotech, health care,

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finance industry connections to say nothing of the ethnic traffic that will benefit. Massachusetts has the sixth largest ethnic Chinese population in the United States. For tourism, this will be a long-awaited service. Boston is known in China, and as Chinese outbound travel has grown exponentially, you can be sure the hotels, restaurants, retail stores and attractions in New England will see an influx of tourists worth millions of dollars.

How important is the Dreamliner to the route’s feasibility? It’s critical. The airplane we used in Seattle, the Airbus 330, while offering a great product, was not suitable for the longer route to Boston. The Dreamliner, in addition to providing a superb inflight product, is more energy efficient and faster, so it saves time and reduces carbon emissions.

Will you consider taking the service to daily? Yes, for peak season, this is very likely. We’re watching bookings, and there’s a good chance we’ll increase frequency sooner than later during the summer months.

How does Boston fit in with your existing services to Chicago and Seattle? This is our first and long-awaited East Coast gateway. Particularly

Chinese-originating passengers visiting North America can arrive at one gateway and depart from another. While we do have Toronto service, that added a second visa requirement for visitors and was more difficult. Seattle feeds traffic primarily from the Pacific Northwest and West Coast, while Chicago gets traffic from the Midwest and Southeast. Boston will feed from New England and the East Coast.

What initiatives do you have planned in the run-up to the launch in June in both China and the US? We have begun some limited advertising in China and the United States; as the date approaches, we plan to roll out more ads and work with Massport and various entities in New England to make people aware of the new service through a variety of events.

What impact has the new Chinese visa law that allows US citizens to spend up to 72 hours in major Chinese cities without a visa had? We’ve seen an impact in our existing trans-Pacific service with people using Beijing as a stopover point, especially to points in Thailand. The former 24-hour limit was impractical, but the 72 hours allows people to really get a feel for Beijing. It also allows travellers going to Hong Kong to stop in Beijing for a short stay if they wish.

ROUTES NEWS 2, 2014

Airport one2one

Darwin Airport was an award winner at last year’s Routes Marketing Awards. Routes News caught up with Jim Parashos, director commercial and aviation development. Jetstar has announced changes at Darwin – how will that affect the airport? While Jetstar’s decision to de-hub Darwin is disappointing, the announced changes will have minimal impact from an overall capacity perspective. Some of the adjusted services were seasonal supplementaries, so by our estimates the overall changes are equivalent to less than two flights per week on a yearround basis. The Darwin market remains strong, and this has been demonstrated by a number of recent announcements, including the introduction of Tigerair on Brisbane–Darwin, the retiming of Virgin Australia’s Brisbane–Darwin services, as well as the recent Qantas announcement of up to 10 extra flights per week from Melbourne, Brisbane, Perth and Sydney. Our international seat capacity is up over 14% year-on-year, while domestic capacity will be up by close to 10%.

How do you work with the Northern Territory tourism authorities on route development? We have a long track record of working closely with the Northern Territory government and Tourism NT. It’s important we have common objectives and strategic directions and we don’t trip over ourselves in our contact with airlines. There are certain areas however that we go it alone, as we did recently in the first phase of our northern Australia campaign, ‘It’s stupid to fly backwards’.

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What is Darwin Airport’s economic role in the region? As an ‘isolated’ city in northern Australia, there is a heavy reliance on air access. We are an essential part of the tourist, trade and business equation, and provide local residents with opportunities to easily connect with the rest of Australia and the world. Given Darwin’s population of 130,000, we are punching above our weight in terms of network reach and services. The airport constitutes some 2% of the Northern Territory GSP (gross state product), which is impressive when you consider this is against some major oil and gas projects, defence and tourism. We are a major employer, a generator of revenue and are majority owned by Industry Super [a pension fund], meaning that most Territorians have a financial interest in us.

What are some of your biggest route wins over the past year? SilkAir’s entry in March 2012 was key in gaining global access, and also demonstrated Darwin was not just a leisure market. Another key win was Airnorth commencing and growing Townsville services. Those services have grown from two to five per week in under two years. The entry of Tigerair to Alice Springs; Malaysia Airlines returning to Darwin; and the ongoing growth of Qantas and Jetstar are other important achievements.

Which routes would you like to most land for Darwin? Auckland: New Zealand is one of Australia’s largest markets, and we

remain one of very few Australian cities without direct access. The challenge in the past has been matching capacity with the right aircraft. Being a similar sector length to Perth–Auckland, traditionally it’s been a widebody proposition only. With new long-range narrowbodies being delivered, or a third country carrier with uplift rights operating the sector, New Zealand is on our radar. In the longer term, Hong Kong would open up China and the rest of the world.

How important are Asian tourist arrivals to Darwin and the NT? We see the China to NT market as two segments – being the Top End (Darwin) and Central Australia (Alice Springs). With the Red Centre and Uluru, it’s a lot easier to market these iconic destinations in the China market. In the case of Central Australia, we will continue to see growth from China via the East Coast. For Darwin, the opportunity lies in narrowbody services from Hong Kong and southern China, which are in our medium-term strategy. The immediate opportunity for Asian tourist arrivals to Darwin is from major South East Asian cities, including those in Singapore, Malaysia and Indonesia – mature markets that know Australia well.

ROUTES NEWS 2, 2014

marks the spot AirAsia X is plotting its pan-Asian multi-base strategy, bolstered by a major aircraft order. CEO, Azran Osman-Rani, speaks with Lucy Siebert.

n many ways, AirAsia X has put the long-haul low-cost debate to bed in Asia-Pacific. With a network of 17 destinations from Kuala Lumpur, the airline believes it has demonstrated the strength of the model in Asia-Pacific. AirAsia X listed on the Bursa Malays (formerly known as the Kuala Lumpur Stock Exchange) last year and is currently focused on beefing up its presence in key markets, including Korea, China and Australia. Its new sister Thai AirAsia X is also expected to get off the ground during 2014. And it even has an eye on potentially resuming European operations in the future and has mentioned the possibility of one-stop services to North America in the long-term. But all its plans are based around establishing sustainable bases in its main markets. Its CEO, Azran Osman-Rani, believes the initial public offering (IPO) really signalled to the rest of the industry that AirAsia X had well and truly arrived. “It is the first time a long-haul LCC has reached the stage of an IPO, which means the business model is not just about us saying it works, but investors have put their money behind it, that this is a viable business model, which is important psychologically,” he tells Routes News.

ROUTES NEWS 2, 2014

Europe return?

Going public also raised somewhere in the range of $230 million for the carrier, part of which has gone towards its US$6 billion aircraft order at list prices for 25 additional A330-300 aircraft, which, if all goes according to plan, could eventually allow the carrier to return to Europe with more efficient equipment. AirAsia X’s first attempt to crack the European market resulted in it pulling flights to Paris and London in 2012, after operating to the European capitals for one and three years respectively. Now, it believes with new technology and more investment behind it, a second incursion could be on the cards later this decade. AirAsia X currently operates 15 A330-300s on services from its Kuala Lumpur base to 17 destinations in Asia, Australia and Saudi Arabia. In addition to A330s, it also has 10 A350-XWB aircraft on order for future delivery. The order of 25 additional A330-300s, which includes extended range versions, means it could look at a return to Europe after 2016 – or could even consider a one-stop trans-Pacific service from Asia to North America. Osman-Rani tells Routes News he is excited about the opportunities the aircraft order presents.

“That obviously makes the economics a lot more attractive. We are slated to take delivery of this variant in 2016, so it gives us the option to look at Europe as a possibility in that timeframe,” he says. “We are not going to commit now as it’s a few years away,” he adds. For North America, Osman-Rani says the new A330-300s could allow AirAsia X to look at a one-stop trans-Pacific service via Japan, Taiwan or even the Philippines. “It [North America] still wouldn’t be accessible direct from KL, but for example if AirAsia Japan takes off again and it has a strong domestic network in Japan, that would give us the option to use that as a hub to go trans-Pacific,” he says.

Teamwork

While Osman-Rani is open-minded about the network possibilities for the future, he is adamant the long-haul airline will base its operations around its sister carrier AirAsia’s bases to ensure sufficient local and regional feed. “We are shadowing AirAsia as they set up hubs. Regions like Thailand, for example, are of immediate interest to us, because Thai AirAsia already has a very strong short-haul network there,” he says. “As AirAsia expands with a number of short-haul hubs, those become candidates for us to put long-haul

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AirAsia X

“It is the first time a long-haul LCC has reached the stage of an IPO, which means the business model is not just about us saying it works,” says Osman-Rani.

planes in and set up our own hubs,” Osman-Rani continues. His comments come after the airline axed Maldives from its network, citing “challenging business conditions” for the decision. The CEO cites the Philippines, India and Japan as potential future markets for expansion for AirAsia X but stresses that any incursions would depend on AirAsia’s scale and ability to provide feed to hubs in those countries. Despite AirAsia India expecting to get off the ground this year, Osman-Rani says AirAsia X would take a cautious approach to that market. The airline previously served Mumbai and New Delhi before pulling out in 2012, and he says India remains a tough market for low-cost carriers due to its high airport and fuel costs and bureaucratic regulatory regime. “It is a very large and complex market. It requires a lot of investment to build a

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brand, to build a distribution network, and we were simply sub-scale,” he says. “If AirAsia India were to invest there, lay the groundwork, set up distribution systems, build up the AirAsia brand to the point that it becomes a household brand name, then it paves the way for AirAsia X to ride on that. It is something we are looking at very keenly but we want to make sure AirAsia India leads it from the front,” he adds. One market where AirAsia X appears to have found success beyond what it could first have imagined is Australia. It now flies to five Australian cities (Gold Coast, Sydney, Adelaide, Perth and Melbourne), making it the country’s fourth biggest international carrier. Not bad for a brand that only entered Australia in 2007 with its first ever longhaul flight to the tourism capital of the Gold Coast in Queensland. Despite missing its target of serving five Australian cities within five years

of operation – it got to Adelaide in its sixth year – the market has nonetheless proved to be a major success for AirAsia X. Osman-Rani attributes much of the airline’s success in Australia to its competitive airports and support from its tourism organisations. “It is certainly a market that has taken well to the low-cost carrier proposition; people feel comfortable buying online, airports are competitive, they understand that they need to structure pricing and services that suit a low-cost carrier,” he says. Despite the success AirAsia X has found in Australia, Osman-Rani says the carrier won’t be making any sudden moves across the Tasman to New Zealand. It launched to Christchurch in April 2011, but pulled out in May 2012. While the CEO says he is “personally interested” in the market, he adds: “For 2014 we really need to focus on concentrating and building up a stronger position in our core markets.” Thailand is one of those core markets and Thai AirAsia X is preparing to get off the ground soon. The carrier now has its Air Operators Certificate (AOC), and former music and entertainment executive, Nadda Buranasiri, has been appointed CEO. Osman-Rani says he is hopeful of a launch in the first quarter of 2014 and says the Thai subsidiary will focus on routes and destinations where the AirAsia brand is already known – likely to mean a network that includes Australia and China. So while the long-haul low-cost question is debated in conference rooms around the world, Osman-Rani believes AirAsia X will be leading from the front, with sustainable growth in its most important markets.

HEAR HIM

Azran Osman-Rani is the keynote speaker at the Routes Asia Strategy Summit on March 9 at 2:10pm.

ROUTES NEWS 2, 2014

Island style Sarawak is pursuing a five-year air services development plan. Lucy Siebert spoke with tourism chief, Dato Rashid Khan.

orneo: The word conjures up images of traditional warriors, rainforest, mountains and, of course, those endangered orangutans. The island is renowned for its biodiversity and rich cultural heritage, but now the Sarawak Tourism Board is aiming to increase air services and tourist numbers, while maintaining the destination’s pristine nature. Borneo is relatively well known by high-end tourists and adventure seekers in regions such as South East Asia, Europe and Australia, but because it is an island, getting there hasn’t always been that easy. Kuching, the capital of the Malaysian state Sarawak, which shares borders with Brunei and Indonesia, has good connections to Kuala Lumpur with the likes of Malaysia Airlines and AirAsia. In recent years, however, its tourism authority has set out to increase the number of direct flights from the city from other regional hubs and to leverage airline partnerships more. Sarawak Tourism Board launched its five-year air services transformation plan in 2011 in a bid to increase air accessibility to Kuching.

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Dato Rashid Khan

Its CEO, Dato Rashid Khan, told Routes News the air services strategy is a core part of the organisation’s efforts. “One of our biggest issues has been accessibility. We are the third largest island in the world and we need air connectivity as a key fundamental to transform our tourism industry,” he says. “People can’t swim to the island, so we have undertaken to transform our tourism industry with air accessibility as the key pillar,” Khan adds. The plan prioritises working with carriers flying from Kuching to the likes

of Kuala Lumpur International Airport, Singapore, Brunei and Kota Kinabalu on better schedules, offering more convenient connections. “We already had airlines flying here from those major connecting points, but our strategy called for more tolerable transit times through those airports,” he explains. The next phase will see the organisation working with airlines and their codeshare partners, in an effort to get the Kuching code in more of the GDSs. “This will link Kuching to the world,” Khan states.

Event focus

Hosting Routes Asia 2014 is aimed at showcasing Kuching and Sarawak to more airline network planners ahead of the ASEAN community moving towards greater aviation liberalisation in 2015. In particular, the Sarawak Tourism Board is keen to meet with delegates from North Asia, which Khan says is a priority area. “[We are targeting] countries like Taiwan, Korea, Japan and China. The new A320 and B787 aircraft are the ideal aircraft size to operate those sectors [from Kuching]. They also have the eight strategic feeds, which would be very effective for us,” says Khan.

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Sarawak

With Asia-Pacific’s low-cost carrier revolution marching on, Khan says the tourism authority is also working hard on attracting more no-frills services. “We’ve had a good response from the LCCs – they are very robust in their planning. When we engage with them, they often develop new city pairs within Malaysia or the rest of the region,” he says. Already this year the darling of Asian aviation, AirAsia has announced new direct flights from Kuching to Kota Bharu and Langkawi starting in March, and Khan believes there will be more LCC announcements to come. “We are currently in discussions with a few LCCs in Hong Kong and China. They are looking for new business opportunities,” says Khan. And while Sarawak might be a tourism hotspot, there is also growing business traffic due to the Sarawak Corridor of Renewable Energy. This is a 70,000sqkm resource rich area with a population of 600,000 and renewable resources such as hydropower.

Tourism snapshot

But just what exactly can Sarawak offer visitors? Its tourism industry and products are focused on nature and culture, with 28 tribes being native to Sarawak. “We position Sarawak as an adventure product experience – it is mainly naturebased products, which is natural with our 17 national parks.” Activities such as rafting and kayaking are popular, while “culinary adventure” is

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growing in popularity with the “very different foods in the jungle of Borneo” proving popular with tourists, says Khan. Last year, Sarawak welcomed more than three million tourist arrivals between January and September, 6% growth on the same period last year. According to Khan, about 40% of arrivals are international, with the 60% majority being made up of Malaysian visitors. In total, Malaysia welcomed 12.6 million tourists in the first half of 2013 and the country is aiming to boost that to 36 million by 2020. In terms of markets, Sarawak Tourism Board is particularly focused on the UK, Germany and Belgium, says Khan. He says it already records “substantial numbers of visitors” who connect via Kuala Lumpur or Singapore. Khan also points to growing numbers of Chinese tourists who tend to travel to Sarawak with charter operators. He says the tourism board has been particularly active with working with Chinese tour operators or travel companies from other overpopulated cities in the region. “We are engaging with operators especially from the large cities in urban areas – we can put those people back into nature and the fresh air,” he says. While domestic tourists make up the bulk of Sarawak’s visitors, in South East Asia, Indonesia, Brunei and the Philippines are the biggest markets. Sarawak has also prioritised major events as a key pillar in growing visitation and awareness. In 2014, it will host 13 major tourism events, including Routes Asia and the ASEAN Tourism Forum, which took place in January. While those two events have attracted tourism and aviation leaders

Don’t miss Sarawak Tourism Board’s CEO, Dato Rashid Khan, suggests Routes Asia delegates make time for these Kuching experiences: • Sunset cruise on the Sarawak River – see the city from the water • The Kuching Heritage Trail – take in some of the city’s most historic buildings and streets • Cultural performance – highlights of Sarawak’s cultures and traditional life • Satok Weekend Market – buy local wares and handicrafts and feast on street food • A Wet Market – see and taste some local Borneo delicacies

from across the Asia-Pacific region, the annual Rainforest World Music Festival is an internationally renowned event that attracts thousands of visitors and journalists from all over the world. With the tourism board prioritising events and air services in the years ahead, Sarawak looks set to cement its position as one of South East Asia’s leading destinations.

ROUTES NEWS 2, 2014

Malaysia Airlines

Local thinking Malaysia Airlines is looking to strengthen its offering in Asia with more frequencies from Kuala Lumpur to domestic points, its network head tells Lucy Siebert.

he past year has seen Malaysia Airlines (MAS) join oneworld, ramp up operations into Australia and launch flights to Dubai. Now it has set its sights on building frequencies to key airports in Malaysia, including Kuching, Shihaj Abdulla Kutty, head of network & revenue management, tells Routes News. This will see extra frequencies from its Kuala Lumpur hub into Kota Kinabalu, Kuching, Johor Bahru, Penang and Langkawi. While Kuching may be less well known than Penang or Langkawi, Kutty describes the destination as “an undiscovered jewel” in MAS’s network. “Unlike many other destinations, there are still unique discoveries available for the curious and the adventurous. Kuching has always been a high-demand route for MAS. Our weekly frequency now stands at 70 flights per week, whereas two years ago this stood at 48 per week,” he says. Connectivity at Kuching and Kota Kinabalu will also be prioritised through the carrier’s community airline MASwings, he adds. MAS believes exciting, albeit challenging, times lie ahead, and Kutty says 2013 was a “year of breaking paradigms and experimentation”. He says new innovations and approaches have allowed the airline to

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increase its average load factors from the “low 80s” to the 90s. “We grew our revenue by more than 10 points and our aircraft utilisation improved by over 15%,” he adds.

Long-haul network

On the long-haul front, MAS upped frequencies into Sydney, Melbourne and Darwin during 2013, thanks to an easing of the bilaterals between Malaysia and Australia. Kutty describes Australia as a “natural market” for the carrier. “We offer seamless connectivity between Australia and UK and Europe, South Asia, South East Asia, China and, of course, Malaysia. With a strong network comes strong network-driven performance. The Australian routes are some of our best performing sectors on the network,” he says. Kutty is, however, more subdued on the performance of Dubai, revealing only that the route is “performing as planned”. MAS has also moved to halt services to Los Angeles starting in March, describing the route as “no longer economically viable”.

Asian focus

MAS has stated that it intends to focus on its own backyard in the short-term, with South East Asian travellers showing

Shihaj Abdulla Kutty

a high propensity to travel, driven by strong home economies. These South East Asian consumers are spoilt for choice when it comes to airlines, with new kids on the block such as Scoot going head to head with AirAsia, Jetstar and the legacy carriers on hundreds of routes in the region. And the competition is set to increase with the onset of ASEAN Open Skies in 2015, even if that initiative is only partially rolled out next year. Despite the challenges, Kutty firmly believes MAS is in a position to compete. “One of the positives that have emerged is that we have the lowest seat mile cost equipment to serve this region,” he says. “While there will be fragmentation of some existing hubs, we foresee that in Asia-Pacific most existing hubs will grow and strengthen. 90% of these hubs are within the reach of narrowbody aircraft,” he adds. Kutty says MAS is as committed as ever to its powerful Kuala Lumpur International Airport (KLIA) hub. “We are building our KLIA hub into a five bank structure that significantly improves our network connectivity. We are also in the process of looking into our future fleet requirements so that we will have the resources in place to serve the requirements of the ASEAN market,” he concludes.

ROUTES NEWS 2, 2014

SriLankan Airlines

Five-year plan Sri Lanka has experienced a tourism boom since its civil war officially ended five years ago. Its flag carrier’s CEO, Kapila Chandrasena, outlines the plan for the next five years to Martin Rivers.

hen Sri Lanka’s 25-year-long civil war ended in May 2009, the government placed tourism at the heart of its economic recovery. This has paid dividends, with visitor numbers almost tripling since the guns fell silent, with 1.27 million tourists last year rediscovering the island’s pristine beaches and wildlife resorts. Much of the growth has been driven by SriLankan Airlines, which increased its traffic 55% between 2009 and 2013. The loss-making flag carrier is not, however, solely focused on the top line. CEO, Kapila Chandrasena, has also committed to a five-year turnaround plan, and he sees upcoming oneworld alliance membership as the best vehicle for growing sustainably. “Our task right now is to consolidate and make the routes we serve profitable,” he tells Routes News. “On the one hand we have to expand our network. On the other hand we need to keep very close control of our cost base, if we are going to at least recover costs and reach break-even.”

Slotting into oneworld

SriLankan Airlines is scheduled to join oneworld in early 2014, having delayed its entry to allow time for IT integration.

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The airline already codeshares with three oneworld members – Malaysia Airlines, Royal Jordanian Airlines and Russia’s S7 Airlines – but Chandrasena sees scope for deeper ties, particularly with some of the alliance’s larger members. “What oneworld brings is it gives us the network reach,” he explains. “Right now we are servicing 62 destinations. Overnight it will be close to 800 destinations. There will be more codeshares with our alliance partners.” At the same time, Chandrasena acknowledges that his future oneworld affiliates will have expectations of their own – “It’s not only about what we can gain from the alliance, but also what we can offer the alliance” – so the business plan also explores new paradigms for developing capital city Colombo as a hub.

Network puzzle

SriLankan Airlines’ network focuses heavily on South Asia, with more than 80 weekly flights to eight cities in India, and more than 30 to the Maldives. About 150 weekly flights between eight domestic destinations are also operated by the mainline Airbus fleet plus subsidiary SriLankan Air Taxi’s Cessnas. The flag carrier’s strong regional foothold is its main offering to oneworld,

which Chandrasena says has a “bit of a vacuum” in South Asia. As well as providing 60% of all flights to Sri Lanka, he describes the airline as the “de facto main carrier for the Maldives”. In order to strengthen its hub-andspoke model, long-haul traffic flows must now be optimised alongside the carrier’s new partners. SriLankan Airlines serves five cities in Europe (London, Paris, Frankfurt, Rome and Moscow), and eight in the Far East (Tokyo, Beijing, Shanghai, Guangzhou, Hong Kong, Bangkok, Kuala Lumpur and Singapore). It also has a sizable presence in the Middle East, and operates daily flights to Karachi in Pakistan. Oneworld members British Airways, Air Berlin and S7 Airlines will give the carrier a “broader footprint in Europe”, Chandrasena says, enticing more holidaymakers to Sri Lanka. Synchronising schedules to ease the transfer of traffic between affiliates will be the first step. With the immediate focus on non-organic growth, new routes in Europe are largely off the agenda. “We decided to take capacity expansion up-front in year one and year two of the business plan,” the chief executive notes, referring to the airline’s post-war network growth.

ROUTES NEWS 2, 2014

SriLankan Airlines

Kapila Chandrasena

“Now is the time for stabilising those routes. What you will see is tweaking of the network, increasing frequencies, and working towards daily flights on all the destinations we serve. “Any new destinations are decided on a stand-alone commercial basis,” he reiterates. “In that sense I don’t see much of a change… I think we have the right coverage to feed the rest of Europe.” Despite the cautious approach, however, Europe remains a critical market for SriLankan Airlines. Some 137,000 British tourists visited Sri Lanka last year, making it the second highest source of tourism behind India. The airline’s 12 weekly flights to London Heathrow account for more than a quarter of its capacity when measured by available seat kilometres.

Western connections

Further afield, SriLankan Airlines is reviewing its US connections ahead of possible codeshares with oneworld’s American Airlines. Given that the US is located on the opposite side of the globe, “both Atlantic

ROUTES NEWS 2, 2014

and Pacific” routings are viable for flights. The flag carrier currently swaps codes with Etihad Airways westwards and Malaysia Airlines eastwards. It also serves two other oneworld hubs in Asia – Cathay Pacific’s Hong Kong, and Japan Airlines’ Tokyo, which raises the prospect of codeshare revisions or even new fifth-freedom services. “Certainly Cathay is our sponsor to oneworld, and we are working very closely [with them],” the chief executive hints. “We see potential synergies because they are very strong in Asia and the US and Canada, and they are servicing Colombo.” He adds that Malaysia Airlines also flies to Colombo, with Kuala Lumpur functioning as a springboard for Australia. “We are looking at all 13 members to really leverage the partnerships,” Chandrasena emphasises. “Some networks offer greater opportunity than others.”

The Chinese dilemma

While its network planners hammer out the most prudent oneworld arrangements, SriLankan Airlines is also grappling over how best to expand in China.

The flag carrier already flies to Beijing, Shanghai, Guangzhou and Hong Kong, and is keen to tap into more emerging markets. However, modest origin-anddestination traffic from China to Sri Lanka has until recently necessitated stopovers in Bangkok on all four routes, with Beijing and Shanghai being upgraded to non-stop services in March. Only one in 10 passengers flying with the carrier from China actually sets foot in Colombo, with most either disembarking in Thailand or continuing on to the Maldives. “Right now we offer Colombo and Malé [the Maldivian capital] for the Chinese. I think this can be scaled up,” Chandrasena begins. “China is an enabling market for us. It’s a growing market, and we have a clean sheet approach.” Attracting more Chinese passengers will again require SriLankan Airlines to develop its hub model. But unlike the regional proposition that benefits oneworld, Chinese travellers are likely to continue their journeys further west to Africa. Chinese enterprises provide more than $30 billion of capital inflows to the continent each year, with annual trade

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SriLankan Airlines

between the two sides ballooning from $10 billion at the turn of the century to about $200 billion in 2012. “We see major high-volume traffic flows between Asia and Africa, and especially China and Africa, given the Chinese investment in the continent,” Chandrasena explains. For now, efforts to capitalise on this geographical advantage are largely at the “market evaluation and modelling stage”.

African dreams?

SriLankan Airlines has yet to launch any routes to Africa (although low-cost sister carrier Mihin Lanka recently added flights to the Seychelles, off Africa’s east coast). Chandrasena says the priority is ensuring any push into the continent is supported by “commercial realities”. “It’s not realistic for me to say we’ll serve 10 points in Africa,” he concedes. “But certainly one or two major points. We will look at some type of partnership or alliance within Africa, in order to fan out across the continent.” Sri Lanka’s President, Mahinda Rajapaksa, made state visits to South Africa and Kenya in late 2013, and “fairly high-level discussions” have also been held with Tanzanian authorities.

ROUTES NEWS 2, 2014

Sri Lanka may, however, face an uphill struggle in convincing an African partner to collaborate. Kenya Airways already codeshares with China Eastern Airlines and China Southern Airlines; South African Airways is moving ever closer to Etihad; and Tanzania’s biggest airline, Precision Air, itself part-owned by Kenya Airways, has almost no international routes. “The markets we serve are very competitive, so we have to be very smart in what we do,” Chandrasena says of the wider landscape. “But we are making the right decisions, and the signs so far are encouraging.”

Government funding

His optimism appears to be matched by shareholder the Sri Lankan government. Colombo has already injected $225 million into the flag carrier over the past two years, and bridging facilities for a further $275 million are now being arranged. Much of the financing is going towards an upcoming fleet renewal. The flag carrier will receive six Airbus A330-300s between October 2014 and the end of 2015, allowing it to replace its existing A340s. Seven A350s will then start arriving in 2017, paving the way for

the eventual replacement of its existing A330-200s. On the narrowbody front, two of the airline’s eight A320s will be replaced with leased A321s in 2014. “The next replacements will be the A321neos,” Chandrasena says, alluding to subsequent long-term orders. Mihin Lanka also operates two A321s and one A320, and will receive two Boeing 737-800s in 2015. Despite deepening its losses to 21.8 billion rupees ($171 million) in the 2012 fiscal year, SriLankan Airlines’ net margin has improved. The country’s target of attracting 2.5 million tourists by 2016 is ambitious, but will be buoyed by an improving global economy. With oneworld also delivering synergies, the flag carrier is hopeful of entering the black around 2017. That would mark the first time it has been profitable since 2007, when the global financial crisis struck and Sri Lanka’s civil war intensified. “I’m really optimistic about the future of Sri Lanka. I think it’s going in the right direction,” Chandrasena concludes. “As a national carrier we have to provide the leadership and drive the growth. We are very challenged and encouraged with this opportunity.”

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Hong Kong Express

Island hopping Hong Kong is proving to be one of the hottest low-cost airline markets in Asia. The deputy CEO of new low-cost carrier, Hong Kong Express Airways, Andrew Cowen, spoke to Richard Maslen.

he unveiling of a new corporate identity in January marked the latest stage of what has been a rapid, one-year transformation of Hong Kong Express Airways (HK Express) from a fullservice operator to a low-cost carrier. After almost a decade in business, the carrier, part of the HNA Group and a sister operation to Hainan Airlines and Hong Kong Airlines, has been reinvented to meet the demands of the local market. For many years, Hong Kong has been a significant Asia-Pacific point and a major regional and international hub. Hong Kong International Airport (HKIA) last year welcomed more than 59.9 million passengers and handled 372,040 aircraft movements, representing annual growth of 6.1% and 5.8%, respectively. Latest figures show that these increases were driven mainly by Hong Kong resident traffic, which was up 13% in December, with visitor traffic showing slower growth of 6% compared with the same month in 2012. Passenger traffic to and from Mainland China, Taiwan

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and Japan recorded the most significant increases, due in part to the growing operations of LCCs at HKIA. “The challenge was clear from my arrival,” Andrew Cowen, deputy chief executive officer, HK Express tells Routes News. “There were already around 17 or 18 LCCs already serving Hong Kong as a destination and with the dynamics of the local market set to see further change, the opportunity to establish a LCC venture and gain first mover status in Hong Kong was a clear driver for the board,” he says. Cowen has been involved in numerous low-cost airline start-ups. His CV includes senior experience at low-cost carriers VietJet Air in Vietnam, Peach Aviation in Japan and PAL Express in the Philippines. These followed roles at Jazeera Airways and Sama in the Middle East and Go in Europe. He joined HK Express in March 2013, tasked with leading the separation of HK Express from the group and establishing it as a standalone LCC with an independent management team.

“Many start-up airlines start as a blank sheet but this project was different,” explains Cowen. “In this part of the world there is a massive benefit to holding an AOC and route licences. The task has been to maximise the synergies of the two airlines while re-establishing HK Express as a standalone LCC operation. HK Express’ existing AOC and traffic rights has helped us expedite this process.”

New network

The transformation began in June 2013 and by September HK Express had opened reservations for the first of its low-cost flights with services to five Asian cities. These included Chiang Mai and Phuket in Thailand; Kota Kinabalu in Malaysia; Kunming in China; and Taichung in Taiwan, with services starting from October. It quickly expanded its network and by November featured flights to Tokyo Haneda in Japan; Penang in Malaysia; and Osaka Kansai in Japan. It plans to introduce a daily route to Seoul in South Korea, starting at the end of March. Cowen says this marks the start of a major expansion.

ROUTES NEWS 2, 2014

Hong Kong Express Hong Kong Express says its new branding reflects its transformation into a low-cost carrier. From left: CEO, Kalid Razack, and Andrew Cowen, deputy CEO.

“Already having the AOC was certainly a major asset for us and enabled us to work to this timescale,” says Cowen. Despite the benefits of already being an established business, there have also been challenges that would not have existed for a start-up. “We had to completely change the network to maximise aircraft utilisation and we are still overhauling third party contracts,” acknowledges Cowen. He adds the transformation comes at a time of fierce local competition, with Jetstar continuing to seek approval for its own Hong Kong-based business. “Competition does concentrate minds,” notes Cowen. To support the development of the business, HK Express has appointed two low-cost specialists: Zhi-min Ma is executive chairman and president and Luke Lovegrove is commercial director. Ma was previously president of West Air in China where he was responsible for guiding West Air through its transition into a LCC. Meanwhile, Lovegrove was previously chief commercial officer of Peach Aviation in Japan and has had a number of senior roles at Tiger Airways, including helping to set up Tiger Australia.

Acquiring A320s

HK Express currently operates a fleet of five Airbus A320 aircraft seating 174

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passengers. There are plans to grow the fleet by a further six aircraft this year and negotiations are currently taking place to finalise the acquisition of these additional aircraft. This will be just the first stage of expansion, which will ultimately see the fleet grow to over 30 A320s by 2018. “Since going on sale as an LCC last September, we’ve experienced overwhelming demand. Almost 200,000 guests have already flown with HK Express, with Tokyo and Osaka being the most popular destinations,” says Cowen. “In 2014, we are planning on adding more than 12 new destinations to our network, offering our guests the opportunity to travel to over 20 destinations across Asia with unbelievably low airfares,” he adds. HK Express will develop a “complementary” network to that of its full-service partner, enabling the group to cover a broader range of destinations. “It is hard for a business to compete at the top end and bottom end of the market at the same time, so the independent focus of HK Express will ultimately help the group to achieve more,” says Cowen. He remains tight-lipped on what the 12 new destinations will be, saying only that additional services could be introduced into countries already served.

“We have to identify where people from Hong Kong want to go. This will underpin our home base and has already proved successful following our social media campaigns ahead of the selection of Tokyo and Osaka as our first new markets following our relaunch, which validated our own analysis,” he adds.

New brand

With HK Express co-operating closely with its sister carrier Hong Kong Airlines and initially operating with a very similar brand, there were concerns over possible confusion between the two businesses. The unveiling of the new corporate identity of HK Express earlier this year went a long way to allaying such fears. The familiar red and gold logo had made way to a funkier, fresher brand image that better matches the airline’s new direction. “The new logo and livery design will be rolled out across all of our branding towards the end of March. We wanted to establish a new brand for HK Express to reflect and support the amazing transition that HK Express has undergone in the past year, and the fresh, youthful and dynamic sense that the new design inspires fits perfectly with our ethos as Hong Kong’s one-and-only low fare airline,” explains Cowen. The first aircraft in new branding is due for delivery in late March.

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Stake

your claim

There is more than meets the eye to building sustainable new route cases for the growth markets of Asia and Africa – and airports can make the difference, writes Sabine Reim.

hen the International Monetary Fund (IMF) released its World Economic Outlook in October 2012 entitled, ‘Coping with high debt and sluggish growth’, it was a reference to its outlook for Western Hemisphere countries. On the other hand, the 20 countries with the highest growth rates were projected to be in Africa and Asia. Ten of these are in Sub-Saharan Africa, six in Asia, two in the CIS and two in the Middle East and Northern Africa. The high GDP growth figures sparked a lot of media and academic buzz and these emerging markets have become of intense interest to airline network planners from Europe, the Middle East and North America. They are the new frontier markets for network diversification when planning inter-regional networks. From the outset, some carriers have been more bullish than others. Indeed, over recent years, commercial viability in emerging markets has been mixed, as the example of European airlines in the Indian market has shown. As accelerated North–South route growth (between developed and emerging markets) has taken root, it became evident that GDP growth, rising income levels and the promise of new frontiers were not a panacea for sluggish growth elsewhere.

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Initially ambitious new-market capacity additions were in some cases pared back, reallocated or foregone in favour of lower growth, lower risk markets. This was a sign to air service development (ASD) professionals at airports, stakeholders in business and tourism and government officials in Africa and Asia that more proactive and co-ordinated engagement with airlines would be needed to ensure successful and sustainable service additions. This shift was also a wake-up call for some markets with historic links to Europe and North America as they realised they could no longer rely on their services ‘as a given’, as global traffic patterns changed the composition of passengers on aircraft. This pattern was accelerated by the need of network carriers in Europe and North America to structure their networks around ‘commercial viability’ rather than ‘historic linkages’ per se. They have to deliver returns to shareholders but cost and yield pressures remain, so it has become increasingly difficult for airline network planners to justify entering a route for ‘strategic reasons’. They are under pressure to demonstrate profitability within the first one to two years of operation – and beyond. Now – more than ever – is the time for ASD professionals representing Asian

and African airports to stake their claims with airlines.

Opportunities

Economic growth opening up interest in more markets has been just one factor in enabling new routes. Other factors have been the availability of smaller, longer-range aircraft – enabling airlines to spearhead smaller and farther markets – as well as the emergence of new carriers in emerging powerhouses (notably ‘the Middle East 3’ and Turkish Airlines). For ASD professionals in Asia and Africa these developments have been both a blessing and a curse. Firstly, the airline planner’s prospective short-listed routes have become longer. While some airports have only just appeared on shortlists because of shifting economic tides, competition for the top spot has become much more intense. In fact, it has become global. This means airports need to move the focus on ‘beating’ a regional rival when presenting their advantages to airlines and to a global view. For instance, whereas a few years ago Delhi competed for an aircraft with Bangkok, Johannesburg and Accra, now Delhi competes with Accra, Boston, Rio de Janeiro and beyond.

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Analysis ASD professionals need to make their case stack up globally. Secondly, historic ties can no longer be relied on. Many routes between Europe and North America and Asia and Africa exist on the basis of historic linkages. These used to be a ‘safe haven’ from competition and made the retention of these cities on the network more viable. However, as markets have opened up and new competition has emerged with the ability to access these markets more efficiently and frequently, historic ties and commercial viability are no longer linked. A key ingredient facilitating the success of new competition from the Middle Eastern region has been the shift from historic North–South flows towards commercially driven South–South flows for which they are favourably located. Therefore, historic direct North–South routes will continue to be at risk, not simply because of more competition, but more so as a result of a shift in global trade flows in favour of South–South (between emerging markets). Thirdly, North–North markets remain attractive and favourable options. These markets, especially between Europe and North America, are tested and established markets. For the major carriers from these regions, these markets are now underpinned by heavily integrated alliance relationships. This gives both certainty and security that incremental growth in these established markets might be preferable to growth in emerging markets, where success is not guaranteed, at least in the short- to mid-term. For ASD professionals in Asia and Africa, these new realities mean they must approach opportunities proactively. They also need to be armed with the commercial information that enhances their position on an airline network planner’s shortlist. It is imperative they put themselves into the network planner’s shoes to convert the opportunity into a sale as part of a solid partnership.

Dynamics and targets

Let’s for a minute ignore bilaterals, security issues and distance-based cost differentials.

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From a pure revenue approach, successful route business cases for Asian and African markets are much harder to draw up scientifically versus those that, for example, evaluate a Europe–North America route opportunity. The reliability and comprehensiveness of the traffic data available to airline network planners in-house is generally patchy and often is a poor indicator of the true potential of a potential route. Consumer behaviour to price and temporal sensitivities are also often an unknown quantity, based on available data. And, not least because of increasing demands on their time, airline planners often simply do not have the time to go beyond traffic data to build a basic opinion of a prospect market. This is also linked to the need for airline planners to present business cases that are backed up with sufficient data to result in a positive route P&L. This is an opportunity for ASD professionals from Asia and Africa to engage directly with airlines to assist with supplying the information they find hard to come by. They can also be a unifying force with tourist boards, business interests and government in joint support of new air service. Emerging traffic flows will also be a key driver that influences which airlines will be the most suitable targets for new service at an airport, and in which order these should be pursued. For example, China is now Africa’s biggest trading partner. This relationship has already been transformed from an almost exclusively resource-based one to more generally a place of doing business, supporting a growth in two-way traffic flows.

Likewise, India’s relationship with Africa is also flourishing as major privatesector enterprises increasingly invest in the continent. At the same time, the role for North–South flows will be maintained and grow, although at a slower pace than South–South demand. This opens up new opportunities for attracting air service, but also requires a new approach that is proactive and assists with sound scientific support to win the race for the next suitable aircraft resource.

Investing wisely

Airline network planning has entered an exciting phase. New growth markets and new aircraft types both enable a network of portfolios that become akin to an attractive basket of stocks, where traditional and new investments have to be optimised to provide the best return. The key difference is that interregional network portfolios cannot be shifted as easily without consequence, they have lower margins and realise returns more slowly than a solid bunch of stock picks. It requires investment and patience that many airlines simply cannot afford. ASD professionals at airports in Asia and Africa are ultimately the nexus for attracting, nurturing and maintaining air service on behalf of their communities through careful selection of target carriers, a clear and realistic strategy for growth as pertaining to their airports and as hubs for bringing together stakeholders on their side. Their time is now to stand up and stake their claim in this world of shifting networks and new opportunities.

ABOUT THE AUTHOR Dr Sabine Reim is vice president, airline network strategy at InterVISTAS Consulting. She joined InterVISTAS after a 17-year career with British Airways where most recently she led the network development of African, Middle Eastern, and Central Asian routes. She also managed route development and airline-airport relationships on the transatlantic network. www.intervistas.com

ROUTES NEWS 2, 2014

The Chinese are consuming fewer luxury goods and services at home, but international travel is on the up, writes Dr Wolfgang Georg Arlt.

uxury retailers in China and some mass market tourism destinations in the region have had to learn that growth rates of Chinese consumers can go in both directions: up, as they did in recent years, but also down, as has been the case more recently. The government’s drive against conspicuous consumption in China and the new tourism law, which has put the brake on “zero-dollar tours”, has changed the rules of the game in the world’s biggest outbound tourism market. For airlines and other transportation companies, there is, however, no need to panic: Chinese consumers are still travelling in ever bigger numbers abroad and a bigger percentage of them are not just walking over the border into Hong Kong or Macau SAR. In 2013, more than 97 million Mainland border crossings were recorded and new air routes, especially those from second and third tier cities, will ensure more Chinese urbanites

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can join the prestigious club of ‘international travellers’. A number of factors shaped developments in the last year and most of them will continue to do so in 2014.

that is no longer possible to see on most days of the year, as the real skyline across the harbour is barely visible through the haze.

Pollution headaches

A second, new ‘push’ factor is overcrowding. The October 2013 Golden Week of collective holidays was criticised, even by the official Chinese media outlets, as a “Golden Mess” and the Golden Week in early February ushering in the Year of the Horse showed no improvement. Ignoring regulations in the new tourism law, many sights, including the Forbidden City in Beijing, sold many more tickets than their capacity allowed and highways turned into giant parking lots, with traffic at a standstill. Even outside this period of travel madness, natural and man-made attractions suffer from overcrowding, which prompts more and more Chinese tourists to flee to destinations outside the country.

The situation in China is helping to ‘push’ Chinese travellers across the country’s borders. Pollution has been getting steadily worse for many years in China, but in 2013 air pollution moved from the level of irritating to the level of simply unbearable. Pollution levels that have never been seen before anywhere on the planet are no longer just a problem for North East and North China; East and South China are also suffering more than ever before. In Hong Kong, huge posters showing the Hong Kong island skyline in the sun had to be erected on the Kowloon side to give Mainland visitors a background for the obligatory photo. This is a view

People pressures

ROUTES NEWS 2, 2014

China

China outbound tourism 2000-2014 in million border crossings

112

2014 and beyond

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

*2014 COTRI est.

Government support

Of equal importance is the change in the attitude of the Chinese government towards outbound travel. The new leadership is for the first time explicitly supporting Chinese outbound tourism in front of international audiences. The new tourism law is helping to end the worst practices of subsidising below-cost package tour offers with income from forced shopping and poor quality services. This new emphasis on supporting the movement of Chinese travellers is matched by many countries’ simplification of visa requirements for Chinese visitors.

Easing visas

Last year witnessed the first dominos fall, with some destinations like the Maldives, Seychelles and Mauritius entering into visa waiver agreements with China. Those destinations were joined by the Bahamas and Thailand towards the end of the year. Meanwhile, about 40 countries and regions, mostly in Africa and South East Asia, already offer visas on arrival for Chinese tourists. Larger countries, including the UK and Germany, have started to differentiate between regular

the EU, Switzerland and Canada. The government of the Mediterranean island of Malta even decided to put European Union passports on sale a few months ago.

ROUTES NEWS 2, 2014

2011

2012

2013

2014 *

Sources: COTRI, CNA,CTA.

visitors and first-time visa applicants, or to issue residence permits for investors.

Adventurous – and wealthy

The Chinese travellers themselves are using their growing travel experience, their new freedom and the better exchange rates for the Ren to visit exotic locations without being the hostage of a tour guide. New forms of travel like cruises and outdoor activities are gaining popularity, and personal experiences, rather than photos of well-known sights, are becoming the way to win the admiration of colleagues and friends. For some, who might be bringing along some investment funds, the souvenir of choice might even be a foreign passport. The Caribbean nations of St Kitts and Nevis, and Antigua and Barbuda sell full citizenship in exchange for various levels of donation or investment, enabling passport holders to travel visa-free to

Looking ahead, China will continue to consolidate its position as the biggest source market for international tourism, easily surpassing 110 million border crossings in 2014. The Chinese will still be on the lookout for blue skies, new destinations and shopping offers for products not available in China. As mobile devices become the most common way to access the internet, mobile Chinese-language travel apps and O2O (offline to online) services will become increasingly important for young, urban, affluent travellers abroad. This year, however, will also witness the widening of the age band of Chinese outbound travellers. International travel is being perceived less and less by frequent travellers as ‘special’ or ‘dangerous’, and more children will join their parents on trips, or travel in youth travel groups with their classmates or friends. At the other end of the scale, affluent Chinese pensioners will appear on the scene in bigger numbers for the first time. Most of them will be in the age group 55–65. Unlike the majority of hard-working middle-aged affluent travellers, they are not ‘time-poor’ and can afford to go on trips that are less frantic, last several weeks and are less motivated by the question of what others might think about their trip. Don’t be surprised if you meet one of them soon in a business class seat next to you, treating himself (or herself) to a self-esteem boost and a bit of comfort.

ABOUT THE AUTHOR: Dr Wolfgang Georg Arlt is a professor of international tourism management in Germany and director of the COTRI China Outbound Tourism Research Institute, based in Germany and China. He can be reached on: arlt@china-outbound.com.

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Indonesia’s roar! Aviation growth rates in Indonesia are startling – Mark Clarkson takes a closer look at airline growth and airport constraints.

n August last year, OAG published an analysis on the future top 10 airports by scheduled seat capacity. What was clear from that analysis was that the largest airports in the world are shifting east. And one of those airports is Soekarno– Hatta International Airport Jakarta (CGK), which is tipped to rise to number five in the world by 2016 based on recent growth rates, having delivered more than 73 million seats to the market in 2013. The Indonesian air market accounted for nearly 225 million seats in 2013 and, while Jakarta (CGK) has grown by some 30 million seats in the past five years, its share of the Indonesian market has actually dropped to 33% (from 39% in 2008) as other airports such as Balikpapan, Banjarmasin, Makassar and Surabaya all grew at faster rates. Indeed the average growth rate for Indonesia over the five years was 17%, while Jakarta grew at 13%. In this rapidly growing market, the other nine airports in the Indonesian top 10 have more than doubled over the past five years and in 2013 accounted for 44% of the Indonesian market. At the heart of this ferocious growth has been Lion Air. In 2013, Lion Air operated to 71 destinations. This compares with 2008, when it served only 30 destinations. The carrier has also been at the centre of the most significant aircraft orders in recent years. In March 2013, it signed a mammoth $24 billion contract with Airbus for 234 A320s. This came after it placed a similar order two years earlier with Boeing ($22.4 billion for 230 B737s). Garuda Indonesia, the flag carrier and for sometime the dominant carrier,

ROUTES NEWS 2, 2014

has also still managed to grow in recent years (and it’s the type of growth that would have satisfied many other carriers) while Lion Air grew at a simply astonishing rate.

Airport headaches

This growth in capacity, however, creates its own pressure and challenges. In 2013, Garuda posted a 90% fall in net income to $11.0 million for the calendar year, down from $110.6 million in 2012. Airline sources cited a weakened currency (the rupiah dropped 21 percentage points in 2013) and overcapacity in the market. With a population of some 240 million people and growth rates far outstripping GDP, the opportunities in Indonesia are there, but the competition is intense and

carriers are fighting over each other to establish their market share.

2014 and beyond

According to data compiled by Bloomberg, in 2011 Indonesia became the world’s 16th largest economy and if growth rates are maintained, it will move ahead of Germany and the UK within 20 years. In the fast-moving world of airlines, and particularly in markets experiencing rapid growth, the biggest hurdle is often infrastructure. This is particularly true in Indonesia. While airlines can, and do, deploy their mobile assets at short notice, responding to competition and opportunity, the airport operators struggle to juggle the huge influx of passengers and the associated aircraft movements.

Top 10 largest airports in the world 2004-2016F Rank

2004

2007

2010

2013

2016F

ATL

PEK

ORD

PEK

ATL

LHR

IST

LAX

HND

DXB

DFW

CDG

ORD

LAX

CGK

HND

PEK

CDG

ORD

LAX

CDG

HND

LAX

DXB

HND

FRA

DFW

FRA

LHR

DEN

FRA

DFW

CDG

SIN

PEK

JFK

MAD

DFW

HKG

Note: Based on scheduled capacity in August of each year; 2016 F extrapolates the average growth rates from 2010-2013.

Source: OAG.

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Indonesia

% market share of airlines in Indonesia Airline

2008

2012

2013

Lion Air

20.3%

41.0%

44.4%

Garuda Indonesia

22.8%

20.9%

20.8%

Sriwijaya Air

9.8%

10.3%

9.2%

Indonesia AirAsia

5.4%

5.6%

6.6%

Citilink Indonesia

0.0%

1.1%

5.1%

AirAsia

2.0%

1.5%

1.3%

PT Trigana Air

0.2%

0.7%

1.2%

Singapore Airlines

2.5%

1.2%

1.1%

Kalstar Aviation

0.0%

1.2%

1.1%

Tigerair Mandala*

4.2%

0.2%

1.3%

Others

32.8%

16.4%

8.1%

Growth of capacity in Indonesia Scheduled seat capacity 300,000,000

225,000,000

Indonesia 225m 150,000,000

75,000,000

Indonesia 104m

CGK 40.6m

2008

CGK 73.3m

2013 Source: OAG.

With the Ministry of Transportation in Indonesia suggesting the country’s airports will handle an anticipated 100 million passengers this year, up at least 15% from 2013, the growth isn’t going to slow any time soon and this places a massive burden on the airport infrastructure, which cannot magically be developed overnight. This growth is reflected in the scheduled capacity for January through to March. According to OAG Schedules Analyser, for the first quarter this year,

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the scheduled seat capacity will grow by 16% – only 1% below the growth rate in 2013. The signs are that this will increase further as we progress through the full year.

All of the top 10 carriers by scheduled seat capacity for the period are forecast to grow. Lion Air is forecast to increase by 12%, while three others – Garuda Indonesia, Indonesia AirAsia and Citilink Indonesia – are forecast to increase at higher rates. Citilink Indonesia is a particularly interesting story. Garuda is looking for a strategic investor to drive sustainable growth and raise funds for its low-cost subsidiary as it seeks to compete more vigorously with Lion Air. Interest is likely to be high and we can anticipate the carrier will initiate more aggressive growth plans. Indonesia’s urgent infrastructure situation prompted the planned opening of Jakarta’s Halim Perdanakusuma air force base to commercial flights this year. The short-term aim is to relieve pressure on Jakarta CGK and the secondary airport will predominantly handle point-to-point services. There are plans to establish a new airport for the Jakarta metropolitan area, with some reports suggesting Karawang, 50km to the east, is the preferable site. Garuda also announced at the Singapore Air Show plans to turn Bintan Island into a new aviation hub. In signing a MOU with Singapore investment company Gallant Venture, the two parties said they intend to work together to develop Bintan Island as the airline’s new hub, with a dedicated airport facility for Garuda and its subsidiaries. Both of these developments highlight the need to consider creative solutions to handle the incredible growth rates for Indonesia. It is clear that, in the short-term seat capacity is going to continue to grow at an impressive rate and, regardless of whether that is over-supply for the market, the challenge facing Indonesia is mighty.

ABOUT THE AUTHOR

Mark Clarkson is business development director Asia-Pacific for aviation data supplier OAG based in Singapore. He has also held senior roles at consultancy ASM and Peel Airports. He can be contacted at: Mark.Clarkson@oag.com.

ROUTES NEWS 2, 2014

Biman Bangladesh

Steeley

determination Bangladesh’s flag carrier has a new CEO, Kevin Steele, who is looking to a refreshed fleet and new long-haul routes for improved profitability, writes Richard Maslen.

Kevin Steele

iman Bangladesh Airlines is attempting to throw off years of financial losses to become a competitive force in global aviation. The makeover is starting with the retirement of its last passenger operating Douglas DC-10 and the introduction of a fleet of B777s, with a view to expanding into new long-haul markets. The next step will see Biman launch a twice-weekly link from Dhaka to Frankfurt, via Rome from March 31. At some point during spring 2014 a twice-weekly scheduled link between Dhaka and New York, via Birmingham, will also commence. The man tasked with turning around the state-owned carrier is former British Airways’ and Etihad Airways’ CEO, Kevin Steele, who spoke exclusively to Routes News about the ambitious plan to double capacity within the next 18 months and then again over the following seven years. Steele, who worked at former Saudi Arabian carrier Sama and Nigerian carrier Arik Air during the past five years, was appointed managing director and CEO at

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Biman Bangladesh Airlines in March 2013 as its first ever expatriate boss. He immediately set about updating the carrier to the 21st century. “I am not under any illusion to the scale of the task. My mandate from the President of Bangladesh was to turn Biman into a profitable world-class airline and we are working towards that goal,” says Steele. Biman Bangladesh’s main hub at Shahjalal International Airport in Dhaka is the primary air travel gateway into Bangladesh. It flies to 16 different countries from there. However, with an ageing fleet of Airbus A310s and Douglas DC-10s, it is no surprise the carrier had an On Time Performance of just 30% prior to Steele’s arrival. “In a short period of time we have managed to get this up to 70%,” said Steele. “Getting this right is fundamental to the success of the business and our ability to attract customers.” The A310s are still flying but since 2010 have been supplemented by a couple of former GOL Transportes Aéreos Boeing 737-800s (leased from GECAS), while the DC-10s are being retired and replaced by 777s. The two leased B737-800s will be replaced by new equipment from 2015, while a mix of leased and purchased 777s will bring down the average fleet age from around 20 years to less than five. Biman made its first steps to renewing its long-haul fleet in January 2010 when

it acquired a B777-200ER on a one-year wet-lease. In 2010, the carrier received two new B777-300ERs from the manufacturer in October and November 2011. “We will receive two more B777-300ERs in the first quarter of this year and these will help facilitate further network growth, including the launch of the new Dhaka–Birmingham–New York route,” explains Steele. Birmingham will become only the third UK airport to have direct flights to New York JFK and will have the only non-stop service between the UK and Bangladesh outside of London. Biman is also expected to launch flights to Manchester in the future. The Midlands has the UK’s second largest Bangladeshi community outside of London and is home to more than 50,000 people of Bangladeshi origin. The New York JFK sector will complement Birmingham’s current daily scheduled flight to Newark Liberty International Airport by United Airlines. “It is easy to sell the Dhaka–Birmingham service but that alone won’t drive profitability on the route,” says Steele. “In the past the airline has not necessarily operated routes for financial returns, but I want to ensure that every new service is not only sustainable but has scope to develop in the future.” “The Birmingham–New York demand will help drive this route and alongside the market dynamics and a good commercial deal from the airport,” he concludes.

ROUTES NEWS 2, 2014

Philippines

Credit: Richard Whitcombe / Shutterstock.com

Helping hand

Four months on from Typhoon Haiyan, Lucy Siebert spoke to the Philippines’ Department of Tourism’s Benito Bengzon Jr.

“

nbelievable” is how Benito Bengzon Jr, assistant secretary at the Philippine Department of Tourism, describes the scene in the Filipino city of Tacloban three days after Typhoon Haiyan struck in November. Bengzon was among the first to travel to the city on a commercial flight after the storm devastated parts of Leyte and Eastern Samar and parts of the Southern Tagalog Region. Haiyan was the strongest tropical cyclone ever based on wind speed and it is estimated to have killed at least 6,000 people in the Philippines alone. That first commercial flight into Tacloban wasn’t only carrying passengers – crucially it was transporting much-needed aid, including clean water and medical supplies. “I have to mention Philippine Airlines and Cebu Pacific – they were the first two airlines to commence commercial flights to the city of Tacloban three days after the typhoon struck. They have been very active in bringing relief goods to some of the people affected,” says Bengzon. Indeed the travel, tourism and aviation industries pulled together in the aftermath of the disaster with numerous airlines putting on special cargo flights and tour operators raising funds to be used for rebuilding. The PATA Foundation was also on the ground helping with relief efforts within days of the storm.

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Four months on and Bengzon says residents in some of the affected areas are slowly starting to get back on their feet. “If you go to the centre part of Tacloban now, you will see business is back, the shops have opened, the hotels have opened, vehicles are moving around, people are starting to reconstruct their houses and kids are going back to school,” he says. Despite the destruction brought by the storm, many of the Philippines best- known tourism spots and the capital city Manila were not affected. The country’s tourism board is keen to get the ‘open for business’ message out. “Tourism is a major contributor to economic growth in the Philippines. Our estimate is that it contributes about 6.5% to the total GDP. It employs about 3.5 million Filipinos. We estimate we get $2–3 billion from tourism,” says Bengzon. He adds that the tourism board plans to continue with its global marketing efforts. This will include participation at Routes and other international travel and tourism events. He says that for the most part marketing messaging won’t be changed as a result of Haiyan, although there may be “adjustments” in some cases. Despite the challenges facing the Philippines, the country is determined to push ahead with its tourism growth strategy, which targets reaching five million tourists in 2014.

Key markets include Korea, US, Japan and China, while “strategic” markets are Taiwan, Australia, Singapore, Hong Kong and the UK. Bengzon adds that the destination will start activities in new markets this year, including Russia, India, the Middle East and some South East Asian countries such as Thailand, Indonesia and Vietnam. The aim is to grow arrivals to the country overall, but Bengzon stresses the focus remains on recovery in the most badly affected areas. “We are so grateful for the financial assistance from different governments and it is something we are harnessing to ensure the people who have been displaced can get back on their feet,” he says. China NORTH PACIFIC OCEAN

Philippines Vietnam Path taken by Typhoon Haiyan

Want to help?

Contact your nearest Philippines consulate or embassy or contribute to the PATA Foundation Philippines Disaster Relief Fund www.patafoundation.org

ROUTES NEWS 2, 2014

Delhi

Capital I Prabhakara Rao

investment

Delhi’s new Terminal 3 means the gateway is prepared to welcome new airlines and increased frequencies alike, CEO, I Prabhakara Rao, tells Shayan Mallick.

ach year, Delhi hosts one of the biggest travel trade shows in Asia-Pacific, the annual SATTE event, attracting travel buyers from across the globe. This year the event featured a panel discussion debating India’s scope to attract more MICE (meetings, incentives, conferences and exhibitions) business where Delhi’s airport was placed in the spotlight. During the discussion, an events director from Finland-based company Brivatum, Anna Junnila, described her first visit to India nine years ago where “everything went wrong” – starting at the airport. That experience put her company off operating in India for nearly a decade. Now they are back and Junnila described the change as “like night and day”. “I have now seen the new Delhi airport. I have actually experienced the

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incredible India. I know my colleagues would be happy to come back and do more of the conferences here,” she said. The improved facilities and passenger services are the result of GMR Group’s years of investment in the gateway, which sought to transform the airport into a leader in the region. The latest addition is the new Terminal 3, added to help the airport to cope with ever-growing passenger numbers. Last calendar year, the airport handled 36.7 million passengers – a 7.3% passenger growth compared with 2012. The airport’s CEO, I Prabhakara Rao, says India’s domestic carriers have been driving higher passenger numbers. “We credit this boost to our airline partners, especially our domestic carriers who added several new routes and increased frequencies on existing metro and non-metro routes,” he says.

“During the same period, existing international carriers added additional frequency and we had new carriers starting up service as well from DEL,” he adds. In order to support future growth in what is proving to be one of the fastestgrowing markets in the world, Delhi’s master plan outlines an eventual capacity of 100 million passenger by 2026. Its current capacity is 62 million and with passenger numbers hovering around 36.7 million there is scope for growth in the current facility and Rao says no major infrastructure developments or expansions are on the short-term horizon. “Together our terminals have a capacity of about 62 million passengers, so we feel that we are well prepared. Our airline partners should not expect any big changes to the infrastructure

ROUTES NEWS 2, 2014

Delhi

>>> T3 FAST FACTS • C apacity: 34mppa • T erminal area: 5.4 million square feet • R etail area: 215,000 square feet • C heck-in counters: 168 • B oarding gates: 48 ir bridges: 78 • A Delhi’s Indira Gandhi International Airport now has capacity for 62 million passengers a year.

as it pertains to their operational and airside activities,” he says. Under the management of private operators, India’s airports have sought to prioritise retail and duty free spaces to grow non-aeronautical revenues. Rao says Delhi is constantly looking to improve its retail offering. “As far as passengers in the terminal are concerned, it is always our attempt to make their experience a special one – one that perhaps they will not forget. Our retail teams are constantly executing new ideas in the passenger space,” he says.

Challenging times

Despite innovations in some areas, it is no secret that India’s aviation sector is facing some big challenges. The FAA has downgraded the country’s aviation safety rating to Category 2, citing a lack of safety oversight. This means that Indian airlines cannot increase their flights to the US and carriers currently operating services will face increased scrutiny. There is a sense that India’s industry will also face closer scrutiny from other international regulators as a result of the FAA’s move. Despite this, India’s authorities believe they can resolve the issues by March, including appointing sufficient flight operation inspectors. The safety concerns raised by the FAA are worrying, but India is also recognised as

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being one of the most difficult countries for airlines to operate in, with major regulatory and bureaucratic challenges. The Indian industry is also struggling with a significant skills shortage. However, Rao insists the industry as a whole is in a good position to meet the challenges. “The potential of the Indian aviation industry is enormous and there have been some interesting recent developments. The establishment of AirAsia India and Tata SIA; the Jet Etihad partnership; the interline agreement between Tigerair and Spicejet; the establishment of India’s largest pilot training facility (a project of Indigo Airlines, Canadian Civil Aviation); and the future privatisation of second tier Indian airports,” the CEO says. “By 2020, it is predicted that traffic at Indian airports is expected to touch 450 million passengers. In my opinion, the outlook remains healthy; and one of growth,” he adds. Certainly on the network front, Delhi has had a strong year, adding a number of domestic and international points, as well as seeing capacity increases on core sectors. The Indian government’s move to allow foreign airlines to fly the A380 into Indian cities will, without a doubt, see foreign carriers dispatching the super jumbo to Delhi in the near future.

New additions

The airport has also welcomed a handful of new carriers in the past year, including Sri Lanka’s Mihin Lanka; Kyrgyzstan’s Kyrgyz Air; Iraqi Airways; and Thai Smile. Most recently it also added Malaysia’s Malindo Air. These carriers now connect Delhi to the likes of Bishkek, Phuket, Basrah and Herat. In addition, Air India launched new flights to Melbourne and Sydney, an important new direct link to Australia for the airport. On the domestic front, new domestic destinations include Imphal, Trivandrum, Khajuraho, Dibrugarh and Varanasi. With two new Indian carriers looking to launch later this year, there will be more capacity coming into the Indian market soon. Both AirAsia India and the new TATA-Singapore Airlines venture are hoping to start operations later this year. Delhi is ready and prepared for the new entrants, claims Rao. “We have landside, airside and terminal capacity at T3 to accommodate and grow any start-up airline. We have three operational runways and a state-of-the-art terminal. We are able to accommodate new airlines without any impact on our existing operations,” he says. By the sound of it, delegates at next year’s SATTE event will be able to make further comparisons on just how far Delhi has come.

ROUTES NEWS 2, 2014

Bigwinner Macau is the biggest gambling market in the world. Peta Tomlinson finds out how the island’s airport is betting on the future.

here are a hundred and one things to do in Macau that don’t involve gambling, yet casinos still dominate the tourism sector. That’s because it is a profitable business: as the only place in China where gambling (other than on horse racing) is permitted, the Special Administrative Region of Macau pulled in US$45.2 billion in gaming revenue in 2013, according to figures provided by the Gaming Inspection and Co-ordination Bureau. That number far outstrips not only Las Vegas’ tally (around US$6 billion) but the entire US market (US$37.3 billion). This, from a tiny peninsula between Hong Kong and the Chinese mainland, which has just 35 casinos, compared with some 12,000 casinos across America. But although visitor numbers exceeded 29 million in 2013 – most of those from the mainland – the majority stayed just for one day. So tourism authorities and individual operators are on a mission to change the perception of Macau to be more of a family destination – a move Macau International Airport is right behind.

ROUTES NEWS 2, 2014

Eric Fong, director of marketing at the airport, points out that Macau, with its Portuguese and Chinese roots, is Asia’s historic meeting point between East and West. “Possessing World Heritage sites, mega tourism and entertainment complexes, top-level convention and exhibition centres, luxury shopping and resorts, the city is an ideal destination to relax and recharge,” he says. At the heart of it all is Macau International Airport, the region’s “airport in the city”, situated 10 minutes’ drive from major attractions, and which is notching up growing numbers of passengers.

Aviation transformation

Twenty years ago, Macau didn’t even have an airport. Passengers would arrive either by sea (the ferry from Hong Kong takes about one hour), or by land, from across the mainland border. With its economy growing, Macau needed air services to enhance its position in the world, which saw it being an important link between two ideologically separate parts of Asia.

Fong explains: “During that period, there was no direct aviation service between China and Taiwan, so building Macau International Airport (MIA) served as an air bridge between the two places.” Macau International Airport Co., Ltd. (CAM) was established and registered in January 1989, and construction began the following November. “This was probably the most magnificent construction project in Macau history, because it involved building an artificial island in the sea, to be used as an airport. This was the first project of its kind in China, and one of only very few similar projects anywhere in the world at that time,” says Fong. The project comprised of three parts – terminal zone, artificial island and two taxiway bridges – and took over five years to build. Commercial flights commenced on November 9, 1995, and every year since, a designated Aviation Day marks the date that the people of Macau “fulfilled their aviation dream”.

Easing access

Today, Macau International is an international port gaining in both strength and numbers. Traffic statistics show passenger volumes grew 10% and 12% respectively in 2012 and 2013. As an emerging hub of

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Macau South East Asia, MIA is now connected to 35 destinations around the world. One reason for this growth is its convenience, Fong explains. “The airport is within a 10-minute drive of Cotai Center, where many beautiful leisure resorts are located. With a 20-minute drive, you can reach the Central Business District. “We are a fully-functional, 24-hour airport. Our ILS CAT II equipped runway, constructed in accordance with ICAO standards, is capable of handling long-haul flights. Phase one of the airport is equipped with a full range of passenger and cargo facilities designed to handle six million passengers, and 165,000 metric tons of freight, per year,” he adds. Another advantage is the Two Customs, One Checkpoint service introduced in 2005, offering extensive land and sea cross-border connections to cities in the Pearl River Delta regions and Hong Kong. Passengers using this time-saving service are exempt from normal immigration procedures, instead transferred by express link bus directly to the departure hall.

Low-cost evolution

Like every airport around the world, Macau’s journey has not been without its challenges. Passenger numbers dropped in 2008, when direct flights were launched between Taiwan and mainland China, and again in 2009, after the tightening of mainland Free Independent Traveller (FIT) permits. “2010 was another tough year with the economic downturn, and oil price hikes, resulting in less demand for travel,” Fong says. Despite these challenges, Macau prioritised wooing low-cost carriers in a bid to diversify its tourism base. That saw AirAsia adding a Macau route in 2004, followed by Tiger in March 2005. Other LLCs that now serve Macau include Cebu Pacific Airlines, JIN Air, Air Busan, Eaststar Jet, Zest Air, Thai Smile and Spring Airlines. These carriers helped arrivals from South East Asia to increase from 7% of total passenger throughput in 2004 to 39% in 2013.

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This was probably the most magnificent construction project in Macau history, because it involved building an artificial island in the sea, to be used as an airport The airport has also worked actively with existing airline partners and related tourism entities to increase flight frequencies, and is actively cooperating with travel agencies to develop charter services. Promotion and marketing efforts across China have led to the launch of services to the mainland cities of Wenzhou, Shenyang, Zhengzhou, Tianjin and Kunming in 2013. This year, that work continues, with the airport keen to see new direct flights from Jakarta or Indian cities. Jetstar Pacific Airlines also plans to launch services from Macau to Danang and Hanoi in March, while Qingdao and Dalian routes are being targeted to further strengthen its China network.

Looking ahead

At the same time, MIA is investing in infrastructure and planned or completed 161 projects in 2013. This included construction of a new jet hangar, and the planning of a major passenger terminal expansion. Focusing on the customer experience, a Kid’s Zone was recently launched to entertain young passengers and a wide

variety of items from international brands to local products were introduced at the duty free shops located at the airside departure hall. “The airport has completed several F&B renovation projects lately, offering a wider selection of dining choices,” Fong continues. “We have set up our own social networking accounts, such as the WeChat smartphone app and Facebook fan page, enabling passengers to be updated with real-time flight information,” he adds. “Lastly, so passengers may enjoy Macau hospitality during seasonal events – such as the Grand Prix and Dragon Boat Festival – the airport holds periodic exhibitions, along with displays promoting local cultural and creative work.” Resort operators, for their part, are demonstrating their venues offer far more than gambling. Headline acts draw large crowds to some of the biggest shows on the world stage, while sporting events such as boxing and mixed martial arts, and high-profile basketball games, are proving family favourites. As Macau evolves, one thing is a sure bet: modern Macau has arrived as a destination in its own right.

ROUTES NEWS 2, 2014

Dream land >>> FAST FACTS • GDP growth in 2013: 3.5% • P opulation: 4.4 million • www.tourismnewzealand.com

New Zealand’s tourist arrivals are on an upward trajectory, bolstered by a blockbuster film, new air services and increased capacity on key routes, writes Chris Beanland.

RR Tolkien spent his childhood in Birmingham, but the landscapes of the British city haven’t quite captured the public imagination in the way that New Zealand’s have. The 2001 release of Peter Jackson’s first Lord of the Rings film – all shot in New Zealand’s beautiful back country – really kick-started tourism to New Zealand. This trend continues with strong inbound visitor numbers as the country bounces back from the devastating 2011 Christchurch earthquake. For the year ending November 2013, arrivals were up 5.3% compared with 2012. This strong performance has prompted Tourism New Zealand to invest in more marketing – and it seems to be paying off. “We received significant new government funding in July 2013 for the 2013 to 2014 financial year, which has resulted in increased marketing efforts

ROUTES NEWS 2, 2014

and industry confidence,” says Justin Watson, director of trade, PR and major events for Tourism New Zealand. The organisation has again used ‘set-jetting’ as a carrot to lure visitors with their ‘100% Middle-earth, 100% Pure New Zealand’ campaign pegged on the movie The Hobbit. Tourism New Zealand is also tying in closely with the country’s flag carrier. “Air New Zealand and Tourism New Zealand signed a memorandum of understanding valued at more than NZ$20 million, in a one-year partnership to undertake joint marketing activity promoting travel to New Zealand in selected international markets,” explains Watson. “The investment represents an increase in planned joint marketing spend of around 80% compared with 2012.” Tourism New Zealand has identified Latin America, India and Indonesia as key target markets, although China continues to be vital.

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Made in China

In fact, total arrivals from China were up 18.7% for the year to November 2013. This has, however, declined with the new Chinese tour operator restrictions – a trend apparent in nearly all destinations around the world at the moment. And New Zealand is proving so popular with Chinese visitors that China Southern has started operating its new Dreamliner to and from Guangzhou to Auckland, upping capacity on the route by 5%. China Southern is also upping weekly flights from seven to 10 during the current peak southern hemisphere summer season. “We have a unique window of opportunity in China, India and Indonesia to capture more than our natural market share as long as we target the emerging new markets and ensure we are meeting new demand,” says Glenn Wedlock,

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New Zealand general manager aeronautical business development at Auckland Airport. “It’s a great time to be at the forefront of this new world growth,” he adds.

Pacific plans

While growth is focused out of Asia, the Pacific is also proving to be an exciting region for New Zealand, after Hawaiian launched thrice-weekly flights with an A330 aircraft. “With the development of new services from Hawaiian Airlines and Air New Zealand, traffic between Honolulu and Auckland has doubled in the last 12 months,” confirms Wedlock. “We anticipate further growth in [the] next 12 months with Hawaiian Airlines also helping to develop significant traffic increases from the US to New Zealand via Honolulu.” The commercial capital of New Zealand is home to the country’s busiest airport and it has hosted a unique meeting of one of the world’s fastest-growing airlines. “We became the first airport outside of Emirates’ home hub in Dubai to have three scheduled A380s on the ground at one time this year,” says Wedlock. The tie-up between Qantas and Emirates has also resulted in more flights across the Tasman, with 130 weekly flights between Australia and New Zealand in total.

Christchurch recovery

Meanwhile, competitor Air New Zealand has launched Christchurch to Perth, operated with a B767, which is scheduled to operate twice a week until April 2014. Newly renamed Fiji Airways is doubling its capacity between Nadi and Christchurch from July 2014. “Business is very buoyant and we’re very confident,” says Matthew Findlay, general manager of aeronautical business development. “We’ve returned to growth after two years of decline; after some very tough times due to natural events, tough competition and the remnants of the global financial crisis,” he adds. Findlay is especially proud that “this year we opened our new NZ$237 million integrated terminal”.

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International visitor arrivals November 2013 Country

Visitors

% change

Australia

100,304

7.5

China

18,384

-15.8

USA

21,360

28.4

18,464

3.6

Germany

8,864

23.7

Japan

6,368

5.6

South Korea

4,832

3.4

Canada

5,472

27.4 Source: Tourism New Zealand.

The Christchurch’s route development team’s priorities are currently “a North American direct flight, a direct flight to China, and more capacity to Brisbane and Melbourne”, says Findlay.

Capital investment

Meanwhile, in the country’s capital, Wellington, tourism and trade are also performing strongly. “International visitors have increased by 35% since 2009 and we’ve averaged 8.5% growth per annum since 2000 – twice as fast as any other major New Zealand airport,” says Mike Vincent, manager, airline development. “Over the last 12 months, passenger numbers at Wellington Airport have increased by over 6%. Total passengers are expected to reach more than 5.4 million for 2013,” he says. Wellington is famously hobbled by its short runway jutting out into the sea, but plans are afoot to extend the runway. “Wellington Airport and Wellington City Council are in the early stages of seeking resource consent to extend the runway. The extension could be completed within five years and would enable aircraft to operate directly to Asia and North America,” says Vincent. This would open new opportunities to the airport, he adds. “Over 1,200 people fly in and out of Wellington’s catchment every day to and from a long-haul destination – that’s

around 450,000 per year, more than enough to support direct flights between Wellington and Asia or North America (with onwards connections to Europe). Around 80% of this market undertakes a domestic flight to Auckland to connect with long-haul services which adds significant time and cost to passengers’ journeys.” In the short-term Vincent is also keen to see more Melbourne capacity added. While Wellington continues with its discussions about a runway extension, improvements are being made. “We looked at innovative ways to provide airlines access to the market ahead of a runway extension. The airport has recently completed a 300m extension of its clearway which will increase the capability of aircraft on takeoff,” says Vincent.

Sunny forecast

“We anticipate further announcements of capacity which will further open up Auckland’s positioning to Australia, South-East Asia and the Americas,” says Wedlock. “We feel extremely positive about the opportunity for growth as the New Zealand tourism industry re-orientates its investment and marketing away from traditional European markets,” he adds. “Looking forward, I’m very optimistic,” agrees Findlay. “All the right economic conditions exist for more growth to follow.”

ROUTES NEWS 2, 2014

Events essentials

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Marseille is preparing to say ‘bonjour’ to more than 1,000 delegates at Routes Europe in April.

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his year’s Routes Europe will attract more than 1,000 delegates to Marseille, including 100 representatives from airlines. This annual event is the only network planning event where airlines, airports and tourism authorities meet to discuss route development for the entire European region. More than 5,000 route development meetings will take place over three days, offering an unrivalled platform for airlines and airports to do business Face-to-Face with the key decision makers in the industry. With 70 plus airlines registered to attend by the end of January 2014, the event is in its strongest position to date, highlighting the increasing value airlines, both from within and outside the European region, are placing on the information exchanged at Routes events. Carriers such as Air Europa, American Airlines, easyJet, Etihad, Flybe UK, Icelandair, Pegasus Airlines and transavia. com will be represented by senior delegations in Marseille. Along with the Face-to-Face meetings, there will be a strong exhibition element, while the Routes Europe Strategy Summit will feature 25 thought leaders and decision makers from across the aviation sector. The Summit, which is open to all Routes Europe delegates, will provide valuable insights into aviation across the region during a number of moderatorled panel discussions addressing the hottest topics facing the industry. Confirmed speakers include Fernando

ROUTES NEWS 2, 2014

Estrada, strategy & alliances director for Vueling; David Huttner, senior vice president & partner, Nyras Ltd; and Vijay Poonoosamy, vice president international & public affairs, Etihad Airways and chair of the IATA Industry Affairs Committee. Route Exchange Airline Briefings will, once again, be a key feature of the event with eight briefings taking place. These will be delivered by senior personnel from key carriers who will outline opportunities for airline growth, provide an opportunity to discuss their requirements to their target airport market and invite airports to bid for new service. First to confirm their place in this year’s Route Exchange programme is easyjet’s Schedule Development

Manager, Paul Croft, who is set to speak directly to airports about the carrier’s plans for the coming year and provide insightful information to assist airports in developing their pitches.

• 1,100 delegates • 100 airlines represented • 5,000 route development meetings • 25 speakers and panellists • 8 airline briefings

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Events essentials Routes Asia 2014

Kuching, Sarawak, Malaysia 9-11 March 2014

Routes Africa 2014

Victoria Falls, Zimbabwe 22-24 June 2014

Routes Europe 2014

Marseille, France 6-8 April 2014

Routes Silk Road 2014

Tbilisi, Georgia 6-8 July 2014

Rest easy It might seem like World Routes is months away, but now is the time to book your event accommodation through the Official Accommodation Partner, Events in Focus. World Routes will take place at McCormick Place, close to downtown Chicago, and while there are many hotels in the city, Routes is urging delegates to stay in a preferred event hotel. Booking with Events in Focus, which has worked with Routes for years, will ensure delegates secure preferential rates and complimentary transfers to the event venue, networking evening and Chicago O’Hare International Airport. There will also be dedicated World Routes information desks in each of the official hotels providing advice and information on all the event details. All hotels are within 20 minutes of McCormick Place and with the dedicated Busway running from many of the preferred Routes hotels straight to the venue, transfer time is as little as 10 minutes. There are a range of hotels to suit various budgets, including the Hyatt

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World Routes 2014

Chicago, Illinois, USA 20-23 September 2014

Regency Chicago, connected to McCormick Place via an enclosed sky-bridge, which also offers views across Lake Michigan and downtown. Alternatively, just steps away from Michigan Avenue is the Fairmont Chicago, Millennium Park, one of the city’s most stylish and luxurious hotels. Other downtown hotels are the Renaissance Blackstone Chicago Hotel and the Renaissance Chicago Downtown Hotel. Both are convenient for visiting the city’s sights and are just minutes away from shopping, fine dining and the iconic Millennium Park. Meanwhile, the Swissôtel Chicago is located where the Chicago River meets Lake Michigan and has wrap-around views of Navy Pier to Millennium Park.

Hotel bookings are managed by Events in Focus, Routes’ Official Accommodation Partner. Visit Routesonline or to book contact Sara Bowers: sara@eventsinfocus.net

China is calling Routes Asia will return to China for the fourth time in 2015 when the event takes place in Kunming between March 15–17. The city is the capital of Yunnan province in South West China and the event will be hosted by Yunnan Airport Group Co., Ltd. The company owns Kunming Changshui International Airport, and will be supported by their partners Yunnan Provincial Civil Aviation Development and Management Bureau and Yunnan Provincial Tourism Development Commission in the hosting of the event. Routes Asia is the only network planning forum for Asia-Pacific.

ROUTES NEWS 2, 2014

p o t e h t m o r f w ie V NAME JOB TITLE ORGANISATION WEBSITE YEAR FOUNDED MEMBERSHIP

MARTIN CRAIGS CEO n (PATA) Pacific Asia Travel Associatio g www.patafoundation.or 1951

public sector companies More than 800 private and and organisations

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ROUTES NEWS 2, 2014

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