New generation aircraft offer game-changing economics and range for LCCs and FSCs. In the narrowbody space, several LCCs are now operating new generation narrowbody aircraft on long haul routes and disrupting the dominance of the immunised JVs. However, with the exception of Jetstar, Asian LCCs have not yet fully taken advantage of the range of new aircraft technology.
Congested airports with slot constraints and a low yield environment may ultimately dissuade long haul low cost narrowbody operations in Asia. But the region’s FSCs have been amenable to adopting the new aircraft technology and have introduced product innovations such as lie flat business seats to maintain their full service offering.
For example, Philippine Airlines is using A321neos on flights of up to eight hours, opening up new markets in Australia and India that were previously not viable and Air Astana plans to begin operating the A321neoLR on some of its existing Kazakhstan-East Asia routes in 2019, replacing 757s. Both carriers offer lie flat business seats.
While there the jury is out on the impact of the new long-range narrowbodies across Asia, new generation widebodies such as the 787 and A350 have changed the operating economics of competitive ultra long haul markets from the region.
Although there are still high costs and challenges associated with operating ultra long haul routes, the newer generation aircraft present a much more profitable proposition compared with original generation ultra long haul aircraft. This could also impact existing hubs and sixth freedom operators as one-stops decline and new ultra long haul city pairs open up.
But there remain many questions to be answered…
- Will Asian LCCs follow European LCCs in using new generation narrowbody aircraft on long haul routes
- Will lie flat business class seats on full service narrowbody operators become more mainstream?
- Is there still a market for one-stop flights over long haul markets? Will sixth freedom operators suffer?
- How much reliance is there on premium traffic to make ultra long haul routes sustainable?
- Can fuel efficient ultra long haul aircraft overcome the inherent cost challenges of ultra long haul routes?
- How will airlines manage and react to a possible projected downturn in passenger demand coinciding with the expected peak period for OEM deliveries?
This will be one of the topics to be discussed at next week’s CAPA – Centre for Aviation Asia Aviation Summit, which takes place in Singapore between 8-9 November 2018. There are a lot of events in Singapore this time of year, but CAPA is respected for its industry knowledge and the agenda promises insights into the outlook for aviation markets in Asia and much deeper engagement with the core strategic challenges, risks and opportunities facing airlines and airports in Asia.
Understanding aviation markets is CAPA’s great strength and passion and this year’s agenda includes a variety of topics sure to generate interest. New generation aircraft and the reshaping of route economics will be the closing panel session on the afternoon of the Singapore forum on 8-Nov-2018.
It’s hardly a secret that the airline industry is facing myriad challenges, notably in the marketing and distribution areas, as companies with personalised data, and the analytics and artificial intelligence to go with it, become greater threats to the stability of the traditional airline model.
This high-level aviation event, hosted at Capella Singapore, is a forum for debate and discussion of strategic issues facing the aviation industry and it is attracting delegate interest from across the globe. Airline executives from Air France-KLM, Air Mauritius, AirAsia, AirAsia X, All Nippon Airways, Alliance Airlines, American Airlines, Cebu Pacific Air, China Southern Airlines, Delta Air Lines, Emirates Airline, flyadeal, Japan Airlines, Jeju Air, Jetstar Asia, Mahan Air, Malindo Air, Qantas , Saudia Airlines, Scoot, Singapore Airlines, Spring Airlines, Thai Airways, Thai Lion Air, United Airlines, Vietnam Airlines and more are already registered for the summit.
FIND OUT MORE… visit the CAPA Asia Aviation Summit homepage to find out more about this not-to-be-missed opportunity to discuss relevant issues impacting the aviation sector and learn meaningful insights from your industry peers.