Page 19 - AAA NOVEMBER - DECEMBER 2017 Online Magazine

FEATURE AAPA REPORT

the world’s busiest domestic-route list. With been 30 to 40 years of LCC’s expansion, full Hogg, the Chief Executive Officer of Cathay
Jeju-Seoul being the busiest route, followed service carriers (FSCs) are still capturing Pacific, and Jamie Bautista, Chief Executive
by Sapporo-Tokyo at no. 2. “Some of these almost 80 per cent pf traffic share in Asia Officer of Philippines Airlines address
routes hardly existed some 20 years ago.” Pacific and probably more than that in terms “market growth & infrastructure challenges”.
of revenue share. However, when u hear low Airport congestion was the common point
Passenger Growth cost carriers (LCCs) expanding to into long- of concern for all three. Discussing the
Talking about the global passenger growth, haul low-cost, and moving into longer routes, various challenges faced by the respective
showing a trend of +6.5 per cent p.a. for the this is the answer. That’s where the revenue airlines as well as the industry in general,
past 5 years, Mr. Herman said, “We have been is, that’s where the traffic is, and that’s where one of the important point of concern that
beneficiaries. It’s been relentless.” However, the demand is.” was put forth were airport congestion and
cargo market exhibited a much more volatile infrastructural issues. The second panel
trend and which has started to become more Profitability is Rising discussion saw Capt. Puttipong Prasarttong-
robust in the past 18 months. With the Asia In terms of profitability, the last three years Osoth, President of Bangkok Airways,
Pacific airlines being at the forefront of have been very good, with North America Conrad Clifford, IATA regional vice-president
the industry developments, the question being at the forefront, taking double digit for the Asia-Pacific, and Robert Martin, Chief
comes down to “what are the airlines doing margins, much more than the average profit Executive Officer of BOC Aviation, focus on
about it? We have business models, that are margin of US$8 per passenger. For Europe the evolving business models.
continuously adapting to the new dynamics of and Asia, the profits are more constrained, The meeting also saw the aircraft
the marketplace, we have innovative thinking at US$ 5-6 per passenger. The key thing manufacturing giants – Airbus and Boeing,
in terms of group structures & multiple to note is that the growth rate in Asia is the aerospace manufacturer Pratt & Whitney
brands, and we also have four different slightly faster than the rest of the world and the event host China Airlines Talk about
classes of service. Another big trend that we and that as compounds, creating a situation their products and how each one of them
see is the unbundling of ancillary services, where the market is going to double in the are gearing up for the growing market.
pioneered by the LCCs. Airlines are also next 20 years and Asia’s share will increase After a closed-door members-only meeting,
increasingly focusing on revenue network to almost 38 per cent of RPKs. Is the Herdman addressed the media and said
optimisation, particularly the long-haul low- growth environmentally sustainable? Is the that the industry leaders gathering for the
cost,” added Herdman during the Assembly infrastructure development in pace with the 61st Association of Presidents “have good
session. He further stressed that while growing market? The AAPA 61st Assembly reasons to be positive about the continuing
different people have different perceptions of Presidents also threw the floor open to growth of passenger and cargo traffic
of which business models are winning, the panel discussions, where several industry growth in an expanding global economy
real voters are passengers. It’s about where concerns and challenges were discussed. over the past 12 months. Whilst this growth
they travel, how they travel and where they The first panel discussion saw Peter Foster, has been accompanied by considerable
are spending their money. “Although it’s Air Astana’s Chief Executive Officer, Rupert pressure on yields, the most serious threats

oPPosite toP:
Asian passenger and cargo traffic
has continued to grow over the
past 12 months, however continuing
proliferation of restrictive
government policies, excessive
taxes & charges and a lack of
shared vision for the industry
remain a problem

rigHt: Almost half of all
passengers today globally fly
through 179 slot-coordinated
airports. 37 of these are in the Asia
Pacific region and this number is
projected to rise as traffic demand
continues to grow
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