Darwin Airport

Fatigue risk management rules challenge LCC cost reductions as safety issues are constantly reviewed

Low-cost airlines have increasingly scheduled back-of-the-clock flights departing late at night or early in the morning, but regulators are now placing greater emphasis on new issues in pilot fatigue risk management. That in turn is seeing some airlines lose operational advantages and incur a higher cost base, even if arguably justified on safety grounds.

New regulations from India’s Directorate General of Civil Aviation (DGCA) are impacting Air India’s LCC subsidiary, Air India Express. Previously the DGCA’s duty limitations did not differentiate between when duty time was occurring, but now the country’s pilots will be limited to seven-hour duty times instead of nine hours if the duty is for back-of-the-clock flights (officially the window of circadian low, occurring between 02:00 and 06:00). The ruling is applicable for domestic and regional flights.

New Cebu Pacific long-haul operation could push out Philippine Airlines but may require hybrid model

The new plan from leading low-cost Filipino carrier Cebu Pacific to offer long-haul services from 3Q2013 represents not just the fourth low-cost long-haul operation in Asia, but the first time such a carrier has potential to force a full-service rival – Philippine Airlines (PAL) – out of business.

Cebu Pacific will benefit from the Philippines’ extremely price sensitive market that has seen LCCs achieve a staggering 80% share of the domestic market and a fast-growing share of the regional international market. Demand for low-cost long-haul services will come primarily from the large visiting friends and relative (VFR) and migrant worker market. But Cebu’s new low-cost long-haul operation will also benefit from growing tourism and potentially the ability to transfer passengers over a geographically convenient hub if Cebu decides to stray from its original point-to-point model.

While PAL is the nation’s sole long-haul carrier, its lack of global alliance membership, relatively small domestic operation and higher cost base create low barriers for entry. National sentiment for Asia’s oldest airline may run high, but as seen in the Philippines’ domestic market, passengers vote with wallets.

New Darwin routes from SilkAir and Virgin Australia show potential of alliances

As alliances have become more complex, and perhaps seemingly anti-competitive, airlines have been eager to promote any new route additions as direct results of alliance authorisation. Recent examples include Japan Airlines (JAL) opening the first Tokyo link to Boston – and with the Boeing 787 – and attributing it in part to its alliance with American Airlines while All Nippon Airways (ANA) will open a 787 link to San Jose, which the carrier also attributed to its alliance partner, United. In contrast to the glamour of these long-haul routes with high profile aircraft are the new Darwin-Sydney and Darwin-Singapore routes to be respectively started by recent partners Virgin Australia and SilkAir, the subsidiary (subsidiary!) of Singapore Airlines (SIA). Yet what the routes lack in public visibility they make up for in opportunity.

Jetstar still looking into northern Australian hub; states Darwin is too expensive

Jetstar Group CEO Bruce Buchanan stated the airline is still looking into other airport options in northern Australia, despite the Qantas Group recently reaching a new pricing agreement with Darwin International Airport. According to Mr Buchanan, Darwin is one of the carrier’s most expensive airports and it expects it to become even more expensive in the next few years.