CAPA Asia Aviation Summit 2015

Singapore, Singapore
23-24 Nov 2015
Citilink CEO Albert Burhan discusses the carrier’s performance in 2015 and plans for exansion in 2016 and beyond. Citilink is expected to post its first annual profit for 2015 and reach the 10 million passenger milestone. More rapid expasion is expected in the coming years as Citilink adds eight more A320ceos in 2016 followed by the first batch of A320neos in 2017.
Lion Group founder and CEO Rusdi Kirana received the CAPA Legend Award. The Legend award is an occasional award, given to individuals that have stood out as making a substantial long term difference to the industry in which they work. They display rare talent and people skills, so that not only do they change the external environment, they invariably also generate substantially positive corporate improvements.
Singapore Airlines Group CEO Goh Choon Phong was named CAPA Asia Pacific Airline Chief Executive of the Year. This award is given to the executive who has had the greatest individual influence on the aviation industry, demonstrating outstanding strategic thinking and innovative direction for the growth of their business and the industry.
Singapore Airlines long-haul LCC subsidiary Scoot has completed several milestones in 2015 including the transition to a 787 fleet while launching several new destinations and reducing losses. Scoot is planning several new routes for 2016, including already announced services to Guangzhou and Jeddah and up to five not yet announced new destinations in North Asia and India. Scoot CEO Campbell Wilson discusses the initial performance of the 787, the recent launch of Hangzhou and Melbourne, the implementation of a Singapore Airlines interline on Scoot operated flights, the relaunch of ScooTV, the expansion plan for 2016 and the prospects for further improvements in profitability.
Tigerair Taiwan CEO Kwan Yue discusses the start-up's faster than anticipated growth, entry into the Cross-Strait market, importance of the Japan market and the outlook for a low-cost terminal at its Taipei Taoyuan hub.
International flights are a growing part of Vanilla Air's operation. President Tomonori Ishii says over 75% of passengers on international flights are foreigners visiting Japan, helping Japan achieve unprecedented visitor arrival figures. At its Tokyo Narita base, Vanilla competes with sister LCC Peach Aviation. Peach is also flying internationally from Haneda, which Vanilla may consider. Vanilla is also considering international service to Micronesia while China is a large future opportunity. Hawaii and Southeast Asia with widebody aircraft could form part of the carrier's 2016-2018 corporate strategy.
HK Express CEO Andrew Cowen talks about upcoming additions to the fleet, including 12 A320neos and 12 A321ceos. There will be new expansion to Myanmar and Laos in Southeast Asia as HK Express looks for markets that have had limited or no competition. HK Express supports Hong Kong's third runway but has questions about its funding. Partnerships could be logical if they can add traffic in a low-cost way.
Berthold Trenkel, Executive Vice President, Global Traveller Services at Carlson Wagonlit Travel, shares his rules for superior client satisfaction in an entertaining and informative presentation filled with personal experiences. Trenkel leads a team of 14,000 people and concedes that there were “lots of opportunities to make mistakes”. He addresses ways of anticipating and preventing the lapses which affect customers, how to respond quickly when things do go wrong and how to recover customer satisfaction and loyalty. His aim, he says, is traveller satisfaction because “happy travellers mean happy travel managers”.
CAPA - Centre for Aviation, Executive Chairman, Peter Harbison  
2015 has been a pivotal year for the Singapore Airlines Group as it has implemented or announced several components of its new strategy. Early 2016 will bring another milestone as SIA takes delivery of its first batch of A350s, which will be used on thinner European routes starting with Amsterdam and a new route to Dusseldorf. Singapore Airlines Group CEO Goh Choon Phong discusses the upcoming first delivery of the A350-900, the recent decision to resume non-stops to the US with the future A350-900ULR, the Aug-2015 launch of premium economy, the improved performance of Scoot, the launch earlier this year of new joint venture airlines in Thailand (NokScoot) and India (Vistara), the vision for SIA the parent airline and the evolution of the group’s overall strategy.
A new category established for 2015, this award is given to the airport executive who has demonstrated outstanding strategic thinking and innovative direction for the growth of their business and the industry.

Mr Griffiths was selected for successfully managing Dubai through a massive expansion programme and completing an unprecedented runway improvement project.

“In 2014 Mr Griffiths oversaw one of the largest ever runway improvement projects, which required Dubai to operate with only one runway for three months,” Mr Harbison said. “Despite the runway closures Dubai was able to overtake Heathrow in 2014 as the world’s biggest international airport as passenger throughput increased by 6% to 70.5 million.”

CAPA noted that much of the UAE’s economic success comes from the performance and growth of Dubai International Airport. Mr Griffiths became CEO of Dubai Airports in 2007 and has since overseen the operations along with massive development. He managed Dubai InternationalAirport’s successful launch of Terminal 3 in 2008 and is now in the process of overseeing a USD7.8 billion expansion plan.

Concourse D will soon be completed with 32 additional gates, lifting Dubai's capacity from 75 to 90 million annual passengers. Mr Griffiths also leads Dubai World Central, which will eventually be the world’s largest airport with capacity to handle 240 million passengers and 16 million tonnes offreight annually once fully operational.
Bangkok Airways SVP Peter Wiesner discusses expansion plans for 2016 including more aircraft, possible new destinations and additional codeshare partners. Domestic market conditions are challenging, prompting Bangkok Airways to suspend services to Udon Thani. But the airline differentiates itself from LCCs by relying heavily on traffic from passengers originating outside Southeast Asia and having a large operation at the resort island of Samui, where it owns an airport that is not served by any LCCs.  Mr Wiesner discusses opportunities for further growth to its regional international network and at Samui, where Bangkok Airways is now preparing to upgrade and expand its airport.
This award is given to the regional airline that has been the biggest standout strategically, established itself as a leader and demonstrated innovation in the regional aviation sector. Bangkok Airways was selected by the judging panel for its impressive track record of profitability even during challenging times and innovative partnership strategy. “Bangkok Airways was the most profitable airline in Thailand in 2014, growing and remaining in the black despite the civil unrest in Bangkok,” Mr Harbison said. “It completed an IPO in Nov-2014, becoming one of only a few Thai companies to go public in the most difficult of years.” Bangkok Airways has remained profitable through the first three quarters of 2015. The airline has differentiated itself strategically, continuing to grow, boosted by an expanded partnership portfolio.

CAPA noted that Bangkok Airways’ partnership strategy, which focuses on providing domestic and regional international connections with over 15 foreign carriers, has enabled the airline to grow rapidly in recent years in a short haul market that has become otherwise dominated by low cost carriers. Its strategy of owning and operating three airports, including in the popular resort island of Samui, also provides a unique selling point and helps insulate it from competition.

Over the last year Bangkok Airways became the largest foreign airline in Myanmar, reinforcing its strong position in the relatively under-served Indochina region. Bangkok Airways is also the second largest foreign carrier in Cambodia and Laos, enabling its partners to access key fast growing secondary markets.

“Bangkok Airways has proven there is still a niche for full service carriers in Southeast Asia’s short haul market – even independent regional operators that are not part of major airline groups,” Mr Harbison said. “Bangkok Airways has gone against the grain and thrived in an intensely competitive marketplace.”

What’s different about Asia? Up until now, growth for any airline into new markets depended on the so-called ‘network effect’. Big airlines need feed, little airlines need feed. Where does it come from in a market where you don’t have any natural friends? Where does the new kid in town go to have fun? In this session, we explore alternative ways of growing the market through the use of technology and innovative commercial models that benefit long-haul spokes and short-haul hubs. • How are airlines refocusing their networks through partnerships? • Will this blow the Prorate model out on its ear? Will all stakeholders benefit, including the price conscious customer? • What new airline and partnership models could emerge to unlock growth in the Asian market? Moderator: CAPA - Centre for Aviation, Executive Chairman, Peter Harbison Panellists: • Finnair, VP Commercial Strategy & Planning, Hubertus Hessel • Jetstar Asia, CEO, Barathan Pasupathi • Royal Jordanian, CCO, Richard Nuttall • Travelport, Vice President Asia Pacific, Air Commerce, Damian Hickey
A selection of today’s leaders of Corporate Buyers and Travel Industry Suppliers will provide their insight and opinions into the latest trends and developments (both macro & micro) that will affect global and local travel managers, buyers and their programmes over the next 12-18 months. Given the volatility our programmes and travellers face in terms of economics, disruptive technologies, geo-politics & security (amongst other things), these leaders’ thoughts will help shape your corporate travel programme. Our leaders will comment on: • Currency volatility and its impact on suppliers’ pricing (aviation, hotel, etc.) • Fuel price volatility and its impact on airlines with their different hedging strategies and surcharge policies • The impact of LCCs and “Sand Carriers” on your corporate travel programme • The evolving travel distribution landscape Moderator: talking business, Founder, Allan Leibowitz Panellists: • Carlson Wagonlit Travel, Senior Director, Global Program Management, Asia Pacific, Michael Valkevich • IATA, Regional Vice President for Asia Pacific, Conrad Clifford • Jetstar Asia, CEO, Barathan Pasupathi • Revidio Limited, Director & Managing Consultant, Richard Edwards • Standard Chartered, Global Head - Non IT Procurement, James Gleeson
Now we hand it over to the Buyers, to lift the lid on the past successes, current challenges and positioning of their corporate programmes. An indepth discussion will be preceded by a series of short, sharp presentations by the Buyers:
• Challenges of their existing programmes and strategies that have succeeded in achieving better outcomes in Asia. Recognising different cultural expectations, what did you do differently and with what successful results?

Moderator: Association of Corporate Travel Executives, Asia Director, Benson Tang
ECOLAB, Regional Procurement Lead, Asia Pacific & Greater China, Steven Yeow
Goldman Sachs, Executive Director, Corporate Services & Real Estate, John Holden 
McDermott Asia Pacific, Travel Manager, Serene Chua
Rio Tinto, Global Category Principal, Michael Molloy
Asia’s LCCs have successfully challenged the established order of ownership and control and LCC Groups are emerging across Asia. They are now challenging the traditional hubbing role and entering long-haul markets and tapping corporate markets. What’s next? • How is the LCC-to-LCC partnership model evolving? • What’s the model for partnering with full service airlines? • Are LCCs becoming more like network carriers, just with a lower cost base? • How are LCCs evolving their distribution strategies? • The role of airports and technology providers in facilitating LCC connectivity Moderator: CAPA - Centre for Aviation, Senior Analyst - North Asia, Will Horton Panellists: • HK Express, CEO, Andrew Cowen • Jeju Air, CEO, Ken Choi • Tigerair Taiwan, CEO, Kwan Yue • Travelport, Global Head of Product & Marketing, Air Commerce, Ian Heywood • Vanilla Air, President, Tomonori Ishii
This award is given to the low cost airline that has been the biggest standout strategically, established itself as a leader, been most innovative, and provided a benchmark for others to follow.

Peach was selected by the judging panel for quickly establishing itself as a leader in the emerging Japanese LCC sector. “Peach became the first pure LCC in Japan when it launched operations in 2012. In a challenging and increasingly crowded marketplace it has differentiated itself through product and strategic innovations,” Mr Harbison said. “It has now been profitable for two consecutive years and, most importantly, has proven the LCC model can be successful in the Japanese market.”

Peach now operates 22 domestic and international routes with a fleet of 17 A320s. CAPA noted that it has been able to stimulate rapid growth at Osaka Kansai, its main base, and in Aug-2015 became the first LCC to operate from Tokyo Haneda. Peach has often kept a low profile and has pursued steady growth, but this has delivered results – financially, strategically and from market perception.

Peach quickly developed a strong and well recognised brand in the Japanese market, enabling it to differentiate itself from competitors. It boldly set out to target female travellers, whom Peach identified as typically booking leisure trips for the family. Peach has gone on to appeal successfully to a wide base including senior citizens and business passengers. Its success in international routes is driven in part by its ability to attract inbound passengers, which now account for 60% of its total international traffic. Peach has been able to stimulate traffic and promote one-day return international trips from Japan to nearby short haul markets, previously unthinkable. Developing its own check in kiosks has been one of several product innovations. Peach’s independence from All Nippon Airways, which owns a minority 39% stake in the carrier, has been critical. This distance has enabled the management team to pursue cost reductions and develop a new type of airline for Japan. Peach and its fellow LCCs are contributing to a revival of local and international passengers, delivering clear benefits for the Japanese economy.
Some call it loyalty and customer-centricity, whilst the industry buzz word is “Personalisation”. However, others fear it will drive up the cost and complexity of corporate travel programmes. The lure of frequent flyer points on the one hand, and travellers tempted to buy previously unmanaged or unauthorised products and services on the other: Is this a travel manager’s worst nightmare, or do some golden opportunities await? In this panel session, we explore the objectives of suppliers and the concern of corporate travel buyers, and seek the views of those able to manage the impact of the plethora of personalisation and marketing/sales/loyalty messages with which the corporate traveller is increasingly bombarded. • The acceleration of the airlines to merchandise to the traveller (to your travellers) – how is that developing, what should we be excited about or concerned about? • How are LCCs and dynamic pricing of all airlines affecting traditional approaches for Corporates to contract with airlines? How are airline dealing models evolving, and how might buyers modify their corporate negotiation strategy? How will this impact intercontinental air travel / dealing? • What’s the impact of loyalty programmes on corporate travel spend? • What percentage of total air spend is now on ancillaries? Moderator: MW Travel Consultancy, Principal, Martin Warner Panellists: • Accor, SVP Loyalty, Javier Cedillo-Espin • Affinity Capital Exchange Inc, Founder & CEO, Atanas Christov • ATPI, Managing Director Singapore, Matthew Stewart • FCm Travel Solutions, General Manager, Bertrand Saillet • iFLYflat, Founder & Chief Executive, Steve Hui