The Blue Swan Daily brings you a roundup of the most thought-provoking and interesting comments from those industry leaders in the know.
UPS Chairman and CEO David Abney on ordering 14 Boeing 747-8F and four 767F aircraft to be delivered by the end of 2022:
“Our intra-US next-day and deferred air shipments are expanding to record levels, and UPS’s International segment has produced four consecutive quarters of double-digit export shipment growth. To support this strong customer demand, we continue to invest in additional air capacity”.
Ethiopian Airlines Group CEO Tewolde GebreMariam on signing a strategic partnership agreement with Guinea Airlines:
“As part of our Vision 2025 and with a view to enable African airlines to regain market share for travel, to from and within the continent, we are establishing strategic partnerships with many African countries. This partnership is in line with the recently launched African Single Air Transport Market”.
AirAsia India CEO and MD Amar Abrol on how the digital era has taken the world by storm and the aviation industry is not far behind:
“While there are many initiatives in the pipeline, AirAsia is working towards digitising the company and changing the way we communicate to our guests and engagement with our employees”. He also noted that 26% of passengers are first time flyers ever and 50% of passengers are aged between 16 and 35 years. As a result, he commented: “With the increase in consumption of digital content by consumers in Tier II & tier III regions where our presence is dominant, the it is the time right for us to reinvent our communication channels”.
Melbourne Avalon Airport CEO Justin Giddings on AirAsia X’s decision to move its operations to Avalon Airport from Melbourne Tullamarine Airport in 2018:
“This is a 10 year agreement structured to accommodate AirAsia X’s significant growth. It is the first such deal in Australia and provides a unique low cost opportunity for people and businesses to access over 130 destinations throughout Asia. Avalon Airport is easily accessible from Melbourne, Geelong, Ballarat and surrounds. Low cost flights combined with an easy airport experience makes for the perfect partnership”.
Etihad Airways CEO Peter Baumgartner on the airline’s recent performance:
“We had an OK year operationally in 2016, very much impacted like everyone else in the industry, if not more, by overcapacity, but we weathered the storm quite well relative to our peer group. In 2017, we certainly delivered in line with our expectations and I am very bullish about 2018. That’s the reality of Etihad Airways. It should not be blurred by our investment challenges”. Mr Baumgartner noted a turnaround in yield since mid 2017, noting: “Yield is always a function of fare levels and fare levels came down dramatically in past years. The trend accelerated in 2016 because of a stronger than usual over-capacity situation. Capacity growth in 2017 was flat and 2018 is also flat. That will certainly help us get back to a better place in terms of commercial efficiency”. Mr Baumgartner concluded: “When you have an overcapacity situation, airlines chase market share through price and fare levels go down. What has augmented this is a traffic mix impact. When you have more flow traffic as a percentage of the total traffic that you carry, the local content is missing. You compensate that by taking more connecting travellers and connecting travellers come at a lower yield and that leads to a drop in fare levels. But from mid-2017, we saw a very, very encouraging turnaround at Etihad in fare levels. It was market and industry driven”.
IAG CEO Willie Walsh called on the UK Government to end London Heathrow Airport’s “monopoly” over its terminals, stating:
“Most major US airports have terminals owned or leased by airlines… There’s absolutely no reason why this cannot happen at Heathrow. Heathrow’s had it too good for too long and the government must confirm the Civil Aviation Authority’s powers to introduce this type of competition… This would cut costs, diversify funding and ensure developments are completed on time, leading to a win-win for customers”.
Ryanair CEO Michael O’Leary on the carrier’s financial outlook for the remainder of FY2018:
“As we finalise union discussions along similar lines to that agreed in the UK, we expect some localised disruptions and adverse PR so investors should be prepared for same. In certain jurisdictions unions representing competitor airlines will wish to test our commitment to our low cost, high pay/high productivity model to disrupt our operations. We are fully prepared to face down any such disruption if it means defending our cost base or our high productivity model”.
WestJet CEO Greg Saretsky on the carrier tracking Swoop’s growth to see if there is any cannibalisation of its own ticket sales:
“Clearly what we’re seeing is that Canadians like low fares. We are stimulating the market and seeing new travellers coming on. The six cities being served [by Swoop] were already being served by [WestJet] 737s – those aircraft have been redeployed to markets that can be offset by higher fares. We’ve always said that in this segment of the market, he with the lowest cost wins, and Swoop is purpose-built to compete effectively to generate accretive results for WestJet from the day of its first flight”.
Norwegian Group CEO Bjørn Kjos on the carrier’s Jan-2018 traffic results:
“We are very pleased with the continued passenger growth in January, a month traditionally characterized by less demand. The global expansion continues with the strongest growth on routes between Europe and the US. This winter, we once again offer flights between the US East Coast and the French Caribbean islands of Martinique and Guadeloupe, enabling better fleet utilisation during the low season in Europe”.