Earlier this month the CAPA – Centre for Aviation Asia Aviation Summit in Singapore brought together industry experts to discuss the latest emerging developments in the local market.
Here, in part one of our video review of the event, we highlight the first of the panel sessions…
New Generation Aircraft And The Reshaping Of Route Economics
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.
Meanwhile new generation widebodies such as the 787 and A350 have changed the operating economics of competitive ultra long haul markets. 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 onestops decline and new ultra long haul city pairs open up.
Can Airlines Keep Apace With The Growth In Inbound Tourism To Key ASEAN Markets?
Visitor numbers to Southeast Asia have increased dramatically in the past few years. Although China and India have been the biggest single growth driver, other source markets within Asia have also been growing rapidly – as well as more mature markets outside the region.
Vietnam’s inbound market, the fastest growing aviation market in Southeast Asia, has doubled in size in just three years. While domestic growth has slowed the last two years, international growth has accelerated. In a similar vein, neighbouring Thailand, the Philippines, Indonesia and even Singapore has experienced solid visitor growth over the past year. The emerging smaller markets of Cambodia, Myanmar, Laos and Brunei are enjoying an uptick in tourism numbers, with Cambodia in particular witnessing some dynamic airline activity as ambitious startups attempt to grab a slice of this growth.
Realising The Potential Of Low Cost Long Haul Services In The Asia-Europe Market
Asia Pacific has been a pioneer in the development of the low cost long haul model, having had such flights for 12 years, or seven years longer than any other region. Nearly 40% of low cost long haul routes touch Southeast Asia and nearly 15% touch Australia, making them the world’s largest low cost long haul markets.
However there are still ample opportunities for growth. LCC penetration rates in most medium and long-haul markets are still well below 10% compared with the 50% of seats LCCs occupy on short haul routes within Southeast Asia and within South Asia. On true long haul routes such as Asia-Europe routes, few airlines operate because of the low yield profile and aircraft limitations.
Which Emerging Destinations Are A Hotbed Of Activity In SE Asia?
Several secondary airports in Southeast Asia are booming. Tourism is a big driver, enabling airports to attract international flights that were previously not possible. Capacity constraints at primary airports is also a factor, forcing several airlines to open new bases or routes from secondary airports as they expand their fleets.
Asia Aviation Outlook 2019 And Beyond
Bringing together some of the most influential leaders in the travel industry this important panel will provide an outlook of the entire travel industry in 2018 and look forward to what lies ahead in 2019.