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CAPA Airline CEOs in Seoul & Gala Dinner

Seoul, South Korea
3-4 Jun 2019

This special interactive Open Forum, open to all sectors of the industry will offer a unique opportunity to provide a greater understanding of the intricacies of how the NDC proposition is progressing and how different sectors and airlines are being affected.

Legacy distribution systems have for decades presented airlines with the twin problems of high costs and product commoditisation. In efforts to address these issues, carriers throughout the world have invested heavily into establishing their own API channels with agents, while the concurrent push by IATA for airlines to implement the NDC standard has encouraged the industry to adopt a retail focused approach to distribution.

In this Open Forum, industry experts will address all sides of the distribution model, to assess the NDC strategy, what it means for their section of the aviation ecosystem, and how the environment is changing.

Industry experts will include GDSs, OTAs, Travel Management Companies and Corporate Travel Buyers, as well as representatives from IATA and airline members.
Audience participants will have the opportunity to interact with the experts in a wide-ranging discussion on:

  • How different participants are being and will be affected by the evolution
  • Where they are in delivering the strategy;
  • What they would change in the strategy if they could;
  • What is the desired end point;
  • What are the complexities of the strategy;
  • What impact will this have on their bottom line

Session Provocateur: Travelport, Global Head of New Distribution, Ian Heywood

Moderators: CAPA – Centre for Aviation, Chairman, Peter Harbison & CAPA – Centre for Aviation, Senior Advisor, John Thomas

Panel:

  • Amadeus, Executive Vice President, Airlines, Cyril Tetaz
  • CTM, CEO Asia, Larry Lo
  • IATA, Director, Transformation Financial and Distribution Services, Eric Leopold
  • Japan Airlines, Regional Vice President Global & Strategic Sales – Asia Oceania, Derek Ho
  • Skyscanner, Commercial Director, Gavin Harris
  • Travelport, Global Head of New Distribution, Ian Heywood

Asia is the fastest expanding and most innovative market in the world, it has enjoyed spectacular growth over the past several years and while China has clearly led the way, South Korea and Taiwan have also grown rapidly, and even Japan has had a resurgence in the past few years.

LCCs have finally started to penetrate the North Asian market, helping to drive the rapid growth as lower fares have stimulated demand. LCC capacity in North Asia particularly has increased tenfold over the past 10 years, albeit on a small base, and has nearly doubled in just three years. This represents an LCC penetration rate of less than 20%, indicating that there is still plenty of opportunity for further LCC growth. LCCs are planning more rapid expansion in 2019 but the region’s FSCs are also growing, particularly in China.

  • What is Asia doing to meet this increasing demand?
  • Is this level of growth sustainable?
  • How is the travel industry reacting to this growth?

Session Provocateur: Skyscanner, Senior Director, Strategic Partnerships, Hugh Aitken - What is coming from the East? Is China going to eat our lunch?


Moderator: AAPA
, Director General, Andrew Herdman 
Panel:

  • Air Vanuatu, CEO, Derek Nice
  • China Southern Airlines, SVP International & Corporate Relations Division, Guoxiang Wu
  • Skyscanner, Senior Director, Strategic Partnerships, Hugh Aitken
  • SpiceJet, Chief Customer Service Officer, Kamal Hingorani
  • Spring Airlines, Chairman, Stephen Wang

Travelport, President & CEO, Gordon Wilson
CAPA – Centre for Aviation, Chairman Emeritus, Peter Harbison

LOT Polish Airlines, CEO, Rafał Milczarski

As fuel prices deliver short term relief, demand is the big unknown. It’s become almost a truism since the advent of President Trump, the British folly of an imminent Brexit, the rise of European populist politics, and rising debt challenges, to say that the coming year will be characterised by unpredictability.

Outlook discussion points:

  • Low fuel prices offer a period of relief
  • Demand: growth remains solid but may be slowing
  • Recession is merely a matter of “when”, not “if”
  • High growth in 2017 and 2018 has created a more price sensitive consumer profile
  • Asia Pacific aircraft orders suggest oversupply in 2019
  • Increasing pre-eminence of LCCs in Asia
  • The rise and rise of long haul low cost – narrowbody
  • The system for selling tickets is about to be savagely disrupted
  • The arrival of NDC and where it is leading

Moderator: CAPA – Centre for Aviation, Chairman Emeritus, Peter Harbison
Panel:

  • Air Lease Corporation, Executive Chairman, Steven Udvar-Hazy
  • Flybe, CEO, Christine Ourmières-Widener
  • Star Alliance, CEO, Jeffrey Goh
  • Travelport, President & CEO, Gordon Wilson

In an industry with so many variables, any assessment of the future, even looking only a year ahead, is riven with challenge. But there are some indicators that predict outcomes more accurately than others.

One of the more reliable pointers is aircraft orders. These suggest capacity (supply side) conditions in the year to come. Admittedly delivery dates can alter or orders be changed or cancelled. It’s also important to recognise the level of replacement vs net fleet additions. But even with these cautions, the sheer contrasts in scale of orders and deliveries speaks volumes.

Where the Asia Pacific operating fleets are rapidly approaching North America’s dimensions, the fact that the region has no less than twice the number of deliveries planned for 2019 speaks volumes - both for global aviation and for capacity levels in AsiaPac. The net effect contrast is even greater in practice, as North America’s often much older fleets imply a higher concentration of replacements.

In this high level overview, our speakers will delve into current aircraft orders/deferrals to predict the future of our industry.

Moderator: CAPA – Centre for Aviation, Senior Advisor, John Thomas
Panel:

  • airBaltic, Chairman of the Board & CEO, Martin Gauss
  • Air Lease Corporation, CEO & President, John Plueger
  • Gulf Air, CEO, Kresimir Kucko
  • LOT Polish Airlines, CEO, Rafał Milczarski

Flybe, CEO, Christine Ourmières-Widener
CAPA – Centre for Aviation, Chairman Emeritus, Peter Harbison

Kenya Airways, Group Manging Director & CEO, Sebastian Mikosz

Dubai Airports, CEO, Paul Griffiths
CAPA – Centre for Aviation, Chairman Emeritus, Peter Harbison

Privatisation will help drive and speed up innovation for Travelport believes President & CEO, Gordon Wilson. The acquisition, which was completed on 30-May-2019, occurred just days after CAPA met with Mr Wilson to discuss future plans for the GDS, get an update on its NDC offering and discuss the value it provides to agents and airlines all over the world.

Gulf Air CEO Kresimir Kucko discusses the airline’s new strategy and boutique airline model. Gulf Air has increased its focus on the premium end of the market, introducing a new business class product and adding capacity to destinations (existing and new) popular with the business and upmarket leisure segments. Fleet renewal began in 2018 as Gulf Air took delivery of the first batch of new A320neos and 787-9s. The 787-9s feature a new lie flat business class product which is equivalent to first class on other airlines. Gulf Air has decided to also include lie flat business class seats on its new fleet of A321neoLRs, which will be delivered from early 2020 and used to improve its product on European routes. Gulf Air is also planning to add to two to three new European destinations in 2020 as its narrowbody fleet expands and intends to grow its long-haul network by three destinations as four more 787-9s are delivered by the end 2020. Gulf Air’s fleet will consist entirely of new generation A320neo family aircraft and 787-9s by the end of 2023.

Spring Airlines chairman Stephen Wang discusses expectations for fleet and traffic growth in 2019, the recent launch of services to Myanmar, the initial performance of the A320neo fleet, plans for the A321neo and the possibility of acquiring A321neoXLRs. Spring is China’s largest LCC and currently operates an all-A320 fleet consisting of 87 aircraft. In 2020 Spring will reach the 100 aircraft milestone and also start taking delivery of the 240-seat A321neos. The A321neos will be a game-changer for Spring as it will allow the LCC to add capacity on domestic trunk routes and maximise use of slots at primary Chinese airports while further reducing its already very low unit costs. Spring is also now looking at acquiring A321neoXLRs, which would open up new longer routes connecting northern China and Southeast Asia.

In this comprehensive interview, Air Vanuatu CEO Derek Nice discusses the small flag carrier’s recent A220 order, plans for expanding the turboprop fleet, expected improvements in connectivity, the anticipated growth of tourism in Vanuatu and the airline’s corresponding projected growth rate. Air Vanuatu plans to take its first two A220s in 2020 followed by a third aircraft in 2021 and 2022. The new type will be used to increase frequencies to its five jet destinations, which are now served with 737s that will be phased out. Overall capacity will increase substantially and connectivity will improve as more frequencies to Oceania’s main gateways support long haul visitor growth from Europe, North America and particularly Asia. Vanuatu is also planning significant domestic expansion as domestic airports are upgraded, the ATR 72 fleet grows and small turboprops are replaced. Vanuatu is experiencing strong visitor growth, including smaller domestic destinations such as Tanna. Rapid inbound growth is expected to continue, driven mainly by China and other Asian source markets, and facilitated by the connectivity improvements as Air Vanuatu expands.