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CAPA Asia Aviation & Corporate Travel Summit

Singapore, Singapore
8-9 Nov 2018

Japan Airlines, Representative Director, Chairman, Yoshiharu Ueki

The establishment and rapid expansion of cross-border JVs have transformed aviation in Southeast Asia over the last 15 years. There are now 11 cross-border JVs operating in six Southeast Asian countries. Several new JVs are planned or are under consideration.

However, it is questionable whether more JVs are needed. The six main ASEAN markets that have JVs are relatively saturated and the remaining four markets are relatively small. The introduction of ASEAN open skies, which has opened up the regional international market to any Southeast Asian airline regardless of domicile, also provides potential expansion opportunities for airline groups in Southeast Asia without having to set new cross-border affiliates.

The cross-border JV model enabled ambitious airline groups to circumvent airline ownership regulations and expand rapidly throughout Southeast Asia prior to open skies. The model remains necessary for accessing new domestic markets since open skies does not permit foreign airlines to operate domestic services. But domestic competition is already intense and at times irrational, since Southeast Asian airlines have historically prioritised strategic expansion and market share over profitability. Meanwhile there have been calls for the creation of an ASEAN community carrier – where ownership and control restrictions are removed, circumventing the requirement that majority ownership and control resides with nationals of that country’s airline. As part of this, ASEAN member states would recognise community carriers designated to operate in each other’s countries. The real kicker would be amending air service agreements with non-ASEAN countries to recognise these airlines.
• Why has the cross-border JV model been so successful in Southeast Asia?
• What are the prospects for more JVs by Southeast Asian airline groups – within the region and outside
• Is Myanmar an attractive market for a potential cross-border JV?
• Can Vietnam support more JVs?
• With the introduction of ASEAN open skies are cross-border JVs still necessary?
• Why haven’t airlines taken advantage of open skies to launch fifth freedom routes?
• How will the latest developments on the EU-ASEAN front, such as the finalisation of the EU-ASEAN air service agreements, affect the aviation community at the global level?
• Will ownership and control and community carrier issues prove an anathema or way forward for the sustainability of ASEAN member carriers?

Moderator: National University of Singapore, Professor of Aviation Law, Alan Tan
Panel:
• AirAsia, Chief Global Affairs Officer, Juergen Keitel
• CAPA – Centre for Aviation
, Chief Analyst, Brendan Sobie
• Malindo Airways, Senior General Manager – Legal, HR & Corporate Affairs, Siva Kannan
• Watson Farley & Williams, 
Partner, Alan Polivnick

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.

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

  • AAPA, Director General, Andrew Herdman
  • BOC Aviation, MD & CEO, Robert Martin
  • Star Alliance, CEO, Jeffrey Goh

Travelport, Global Head of New Distribution, Ian Heywood

Legacy distribution systems have for decades presented airlines with the twin problems of high costs and product commoditisation. In efforts to address these issues, a handful of carriers in Europe, and now Asia Pacific, 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. The GDS will also need to evolve in order to remain relevant and to compete effectively against other intermediaries and aggregators such as metasearch companies (some of which now have direct booking capabilities), as well as digital behemoths such as Amazon, Google, and Facebook – to gain a slice of the pie.

But as airlines work on enhancing their retail offering and improving their merchandising capability via both direct and indirect channels, a resounding message from industry players is that airlines need to consider the importance of mobile and messaging platforms, which are slowly replacing the desktop as the preferred interface for researching and booking travel.

  • Is this increasingly fragmented and complex commercial and technological distribution landscape sustainable? How will business models evolve in response? Is there a need for a direct connect aggregator?
  • Should airlines build lots of direct connects or revert back to lean, centralised distribution channels?
  • Who is going to be offering services to bridge the gap between airlines/aggregators that are NDC compliant and those that aren’t? Will it be the GDS and IT providers, other airlines or speciality providers?
  • How are newer intermediaries adding value to airline distribution?
  • How do airlines enhance their digital shopfront? Are airlines over-emphasising the importance of airline.com over mobile messaging platforms and bot technologies?

Moderator: Solutionz, VP Global Growth Partnerships & Alliances, Umesh Nair
Panel:
• Amadeus, Regional Director, APAC, Kai Gerrit Jacobsen
• Singapore Airlines,
 SVP Sales & Marketing, Campbell Wilson
• Skyscanner, Commercial Director, Gavin Harris
• Travelport
, Vice President Asia Pacific, Air Partners, Chris Ramm

The digital economy has transformed consumer expectations around the way they research, purchase and experience the airline product. As a result airlines need to work hard to differentiate their product offering and deliver a personalised and seamless experience for customers throughout the entire travel process. This involves a shift in mindset, where airlines need to think of themselves as digital companies rather than just transportation companies enabling passengers to get from A to B. Whether it’s using data to create tailored ancillary offers, implementing enhanced merchandising capability that allows for more cross selling and upselling or introducing virtual assistants to answer simple customer queries, airlines and airports that invest in digital technologies stand to gain from a more engaged and loyal customer base, unlocking top line revenue opportunities and improving efficiencies in the process.
 
  • Putting the framework in place first – deciding on an airline’s digital strategy
  • How can airlines and airports turn big data into actionable insights that intelligently understands and delights the customer (and enhances revenue)?
  • How can each player work together to personalise and enhance the traveller journey?
  • What steps need to be taken to offer holistic, end to end travel distribution experiences?
  • What are the opportunities and implications of AI and robotics? What are some real world applications of AI and how will they impact the future of the aviation industry, from both a customer service and operational viewpoint?
  • How are airlines embracing the digitalisation process and enabling passengers to be connected while in the air? Where to next for inflight connectivity and WiFi?

Moderator: ICF International, Principal, Daniel Galpin
Panel:

  • Bluebox Aviation Systems, CEO, Kevin Clark
  • Caravelo, Chief Commercial Officer, Jonathan Newman
  • Inmarsat, Regional Director APAC, Chris Rogerson
  • SITAONAIR, Vice President Asia Pacific, Katrina Korzenowski
  • Spring Airlines, General Manager of IT, Zhenyuan Zhang

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. Congested airports with slot constraints and a low yield environment may dissuade long haul low cost narrowbody operations in Asia.

But Asian FSCs have been more amenable to adopting the new aircraft technology and have introduced product innovations such as lie flat business seats to maintain their full service offering. Philippine Airlines is using A321neos on flights of up to eight hours, opening up new markets in Australia and India that were previously not viable and Air Astana plans to begin operating the A321neoLR on some of its existing Kazakhstan-East Asia routes in 2019, replacing 757s. Both carriers offer lie flat business seats.

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.

  • Will Asian LCCs follow European LCCs in using new generation narrowbody aircraft on long haul routes
  • Will lie flat business class seats on full service narrowbody operators become more mainstream?
  • Is there still a market for one-stop flights over long haul markets? Will sixth freedom operators suffer?
  • How much reliance is there on premium traffic to make ultra long haul routes sustainable?
  • Can fuel efficient ultra long haul aircraft overcome the inherent cost challenges of ultra long haul routes?
  • How will airlines manage and react to a possible projected downturn in passenger demand coinciding with the expected peak period for OEM deliveries?

Moderator: Cebu Pacific Air, Board Advisor, Garry Kingshott
Panel:

  • Bombardier Commercial Aircraft, Director – India & South Asia, Ajay Mehra
  • flyadeal, CEO, Con Korfiatis
  • Spring Airlines, President, Zhijie Wang
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.

  • What are the largest and fastest growing source markets?
  • Is there too much reliance on China or India?
  • What are the hot destinations in Southeast Asia?
  • What airlines have benefitted from the rapid tourism growth in Southeast Asia and what airlines are best positioned to benefit as the growth continues?
  • Is infrastructure (airports, hotels, roads) keeping up?
  • Are the recent growth rates sustainable?
  • What kind of environmental concerns have arisen? Is there a risk of another “Boracay”, which was shut down for six months for an unprecedented environmental cleanup?
  • How many airlines can the small ASEAN markets support?

Moderator: Watson Farley & Williams, Partner, Alan Polivnick
Panel:

  • IATA, Regional Vice President, Asia Pacific, Conrad Clifford
  • TripAdvisor, Associate Director Flights, APAC, Priyanka Gargav
  • TravelSky Technology, Director Marketing & Sales, International Cooperation Department, Lars Gaebler

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.

  • What long haul markets are poised LCC growth?
  • How do rising fuel prices impact the outlook for long haul low cost routes?
  • Why have we only seen two routes to Europe so far by Asian LCCs?
  • How have the Europe-Asia routes by Scoot, Norwegian and Eurowings performed so far?
  • How do all parties improve issues around virtual interlining and ensure connectivity meets travellers needs?
  • Do Asian LCCs need to partner with European short haul LCCs to make Asia-Europe routes viable?
  • Do the European LCCs serving Asia need to partner with Asian LCCs?
  • How can airline’s leverage off partnerships to extend their brand into new markets?

Moderator: CAPA – Centre for Aviation, Chief Analyst, Brendan Sobie
Panel:

  • AirAsia X, CEO, Benyamin Ismail
  • Japan Airlines, VP Products & Services Planning, Akira Mitsumasu
  • Kiwi.com, CEO, Oliver Dlouhý
  • London Stansted Airport, Chief Commercial Officer, Aboudy Nasser
  • Mango Aviation, Commercial Head, Trevor Spinks
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.
 
International traffic at Cebu in the Philippines grew by 21% in 2016 and 29% in 2017. Clark and Puerto Princesa also have grown rapidly while a new international airport is opening in Bohol is opening this year.
 
In Thailand, international traffic has grown rapidly at Chiang Mai, Krabi and Pattaya/U-Tapao. In Vietnam, Da Nang, Nha Trang and Phu Quoc have enjoyed rapid growth.
 
Qatar Airways now serves four secondary destinations in Southeast Asia (Chiang Mai, Krabi, Penang and UTapao) and will another four in the coming months (Cebu, Davao, Da Nang and Langkawi). Securing Qatar is a major development as most of these markets previously did not have any services outside East Asia.
 
  • Why are airlines pursuing rapid expansion at several secondary destinations in Southeast Asia?
  • Which airlines have been most aggressive at launching new international routes from secondary destinations and airports?
  • How has the outbound China market contributed to this growth?
  • Can these smaller airports realistically support long haul flights?

Moderator: Aviation Cooperation Program, Director, Sandeep Bahl
Panel:

  • AirAsia, CEO, Riad Asmat
  • Jetstar Asia, CEO, Barathan Pasupathi
  • Mactan-Cebu International Airport Authority, General Manager/CEO, Steve Dicdican
Since 2001, some 300 airlines have failed around the world. There are many reasons, ranging from a poor business plan/value proposition, through to management execution, competitive responses and difficult economic conditions, including high fuel prices.
  • How important is it to achieving critical mass? And how big does an airline need to be to avoid becoming a statistic in the column of failed airlines?
  • How important are the credit card companies in the start-up and cash flow equation?
  • What other factors will determine whether we’ll see an increase in airline failures across Asia over the next 12 months?
  • How do airports respond to airlines failing?

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

  • flyadeal, CEO, Con Korfiatis
  • London Stansted Airport, Chief Commercial Officer, Aboudy Nasser
  • Mango Aviation, Commercial Head, Trevor Spinks

AirAsia X CEO Benyamin Ismail discusses the upcoming suspension of services to Auckland and how the Australia market is performing. Mr Ismail cites intense competition and low yields on the Gold Coast-Auckland sector in deciding to drop its only New Zealand route in Feb-2019 (see related analysis report from CAPA). AirAsia X will continue to serve Gold Coast with a daily turnaround service from Auckland, which Mr Ismail says is performing well. Elsewhere in Australia, AirAsia X has just moved its double daily Melbourne service to Avalon and Mr Ismail is encouraged by the initial bookings. Sydney is currently served 11 times per week, increasing to 14 during peak summer weeks, and Perth is served seven times per week, increasing to 11 during peak periods. AirAsia X’s previously operated more flights to Perth and Sydney and also served Adelaide, but Mr Ismail is satisfied with the current reduced scheduled for most of the year and offering extra peak season flights. A relaunch of Adelaide is no longer being considered because the airport is not receptive to LCCs (see related report from Blue Swan).

In this comprehensive interview, Jetstar Asia CEO Barathan Pasupathi discusses the airline’s strategy of focusing on profitability rather than growth. Jetstar Asia has been losing market share to Scoot (see related analysis report) but has no plans to resume capacity expansion. While it continues to add undeserved niche destinations and grow interline/codeshare traffic, Jetstar Asia’s overall ASKs have been declining the last three years and the fleet has not grown in five years. “We are not chasing market. We are performing in the markets we fly,” Mr Pasupathi says.

In this comprehensive interview, AirAsia Malaysia CEO Riad Asmat discusses the outlook and plans for 2019. AirAsia Malaysia plans to take five or six additional A320s in 2019, including its first A321neos. AirAsia Malaysia plans to expand from all five of its bases in 2019 but Mr Riad says infrastructure and resource issues are increasingly challenging as the airline is struggling to find pilots and parking bays. Mr Asmat joined AirAsia in Jan-2018 and talks about the steep learning curve associated with entering the airline industry and the LCC’s performance in his first year at the helm. AirAsia Malaysia has launched several new destinations in 2018, including four in the fourth quarter (Ipoh and Kuantan in Malaysia, Phu Quoc in Vietnam and Silangit in Indonesia). It also has added several new point-to-point routes and has increased frequencies to several existing routes. AirAsia Malaysia is the largest airline in the AirAsia Group, operating 94 A320s to 56 international and 17 domestic destinations.

flyadeal CEO Con Korfiatis discusses the low cost airline’s plans for deploying the three additional A320ceos being delivered in Dec-2018. The Saudia LCC subsidiary is using the three aircraft to open a second base in Riyadh, supplementing its original Jeddah base, and expand domestic capacity by 35% from Jan-2019. The three aircraft increases flyadeal’s fleet to 11 A320ceos after only 15 months of operations. flyadeal has no plans to acquire additional A320ceos and will instead start transitioning to the A320neo or 737 MAX 8 in 2H2019. flyadeal plans to announce by the end of Dec-2018 an order with Airbus or Boeing for up to 50 new generation narrowbody; deliveries are not likely to start for a few years but flyadeal plans to start leasing the new type in the interim to support its aspirations for a 50 aircraft fleet within five years.

Singapore Airlines SVP Sales and Marketing Campbell Wilson discusses SIA’s commitment to IATA’s New Distribution Capability (NDC) and its plans for rolling out the new technology. SIA has emerged as an NDC leader in Asia Pacific and has spent the last year building capabilities and proof of concepts with GDSs, OTAs, TMCs and aggregators. SIA recently launched a developer portal to work with travel partners on NDC and its proprietary APIs. Mr Wilson believes large agencies and TMCs are now aware of NDC and working towards adoption but a lot of education is still needed for smaller regional focused agents in Asia. Airlines in Asia have also been generally slower to adopt NDC than airlines from other regions. “We really need to get the message across in Asia,” Mr Wilson says. “We see NDC or API distribution as a key part of our future distribution strategy.” Mr Wilson also talks about SIA’s digitalisation strategy, which is empowering its employees to deliver better service.

In this extensive interview, Saudia CEO Jaan Albrecht discusses how the airline has successfully transformed over the last three years as it has integrated more than 80 new aircraft and improved its product. Another step change is occurring over the next few months as Saudia moves into a new terminal at its Jeddah hub, resulting in further product improvements and enabling it to pursue more sixth freedom traffic. An increased focus on religious traffic (resulting in a 12ppts market share gain) and costs (resulting in a 27% reduction in non-fuel CASK) are two other key pillars of Saudia’s transformation programme. “I have used the term sleeping giant. Saudia is the 30th biggest airline in the world. We have so much potential but it has been neglected over the years for several reasons,” Mr Albrecth says. “Now with a focused approach we are seeing quite a success in putting Saudia to where it belongs.”

Singapore Airlines SVP Sales and Marketing Campbell Wilson discusses SIA’s rapid expansion in the US market over the last three months driven by its new fleet of seven two class (premium economy and business) A350-900ULRs. SIA has used the A350-900ULR to add 20 weekly nonstop flights to the US, including 10 to Los Angeles, seven to Newark and three to San Francisco. SIA also continues to operate seven weekly nonstop flights to San Francisco using the standard three class A350-900s and will use this type to launch four weekly nonstop flights to Seattle in 2H2019. Mr Wilson explains the decision to add Seattle and the role of of partner Alaska Airlines to provide feed beyond Seattle. SIA is also relying heavily on its network beyond Singapore to feed its expanded operation to the US including routes operated by LCC subsidiary Scoot. Mr Wilson talks about efforts to increase transfer traffic between SIA and Scoot and the importance of the two airlines becoming more integrated.

Saudia CEO Jaan Albrecht discusses the airline’s plans for better leveraging its membership in SkyTeam. Saudia joined SkyTeam in May-2012 but in the first six years was a relatively inactive member. Under Mr Albrecht’s leadership, Saudia is now pursuing a more active role and working on forging codeshares with more SkyTeam members. A new terminal at Jeddah significantly improves Saudia’s ability to connect with partners and Jeddah’s position as a SkyTeam hub. Saudia is also now in the process of joining the SkyTeam Cargo alliance, which it expects to formally enter in early 2019. Mr Albrecht is a major promoter of alliances given his background, serving as CEO of the Star Alliance for over 10 years. Mr Albrecht was also CEO of Aeromexico Cargo when it became one of the founding members of SkyTeam Cargo in 2000.

This award is to the airline that has been the biggest standout strategically during the year, has had the greatest impact on the development of the airline industry, has established itself as a leader, and provided a benchmark for others to follow.

JAL was selected for several new strategic initiatives the group has pursued since restrictions that had been imposed as conditions of a 2010 government bailout were lifted in 2017.

JAL has since resumed expansion with several new long-haul routes including Melbourne and Kona. New JVs have been forged this year with China Eastern and Hawaiian Airlines, supplementing existing JVs with American AirlinesBritish AirwaysIberia and Finnair. JAL also has increased cooperation with Americanand Alaska and has implemented new partnerships with Aeromexico, Garuda Indonesia and VietJet – the latter a pioneering tie-up with Asia’s fastest growing LCC.

JAL established earlier this year a low cost long haul subsidiary, which plans to launch in 2020 with 787s focusing on opportunities in Southeast Asia. JAL already has a stake in Japan’s largest short haul LCC (by fleet size), Jetstar Japan, and the new long haul project will improve its position in the strategically important and fast growing budget end of the market ahead of the 2020 Summer Olympics in Tokyo.

JAL, which contracted significantly in 2010 and 2011 as it restructured, has resumed expansion with RPK growth of around 5% the last three years. The airline group has been consistently profitable the last seven years, generating operating profits of at least USD1 billion every year since FY2011/2012.

“JAL has had a momentous year, pursuing several new partnerships and strategic initiatives while resuming growth,” CAPA executive chairman Peter Harbison said. “The airline group has been consistently profitable since completing a successful restructuring and re-listing early this decade. JAL is now well positioned for future growth as it implements a well crafted new long-term strategy. The establishment of a long haul low cost subsidiary, a pioneering partnership with VietJet and a new JV with Hawaiian to supplement an expanding JV with American are just three of many examples highlighting JAL’s strategic accomplishments.”

This is awarded for an existing airline that has turned around through innovative strategic changes and/or a restructuring exercise.

Saudia (also known as Saudi Arabian Airlines) was selected for its successful transformation, which has resulted in significant efficiency improvements, in-flight product upgrades, fleet renewal and an accelerated growth rate.

Saudia embarked on an ambitious transformation programme three years ago aimed at improving its efficiency and product. The airline has since taken delivery of more than 70 aircraft, resulting in a young new fleet with new in-flight products and higher service standards. Saudia now has one of the youngest fleets in the world, with an average age of less than five years.

The transformation also included a new dual brand strategy, resulting in the launch of LCC flyadeal in 2017. flyadeal and Saudia’s strong domestic position is being effectively used to fend off increased local competition as the market liberalises.

This year Saudia has moved into a new terminal at its Jeddah hub, resulting in massive customer service improvements particularly for transit passengers. Saudia’s new strategy includes pursuing more sixth freedom traffic and inbound tourism as the airline expands its international operation. More than a dozen international destinations have been launched in the last two years while capacity has been added to several existing destinations.

“Saudia has been totally transformed and has emerged as a strong network airline with a well-executed dual brand strategy,”CAPA executive chairman Peter Harbison said. “Saudia is well positioned to benefit from a booming local market as Saudi Arabia’s youthful population travel more frequently and as the kingdom diversifies, becoming a major tourist and business destination.”

This award is presented to the regional airline that has been the biggest standout strategically, has established itself as a leader, and demonstrated innovation in the regional aviation sector.

Alliance Airlines was selected for its flexible approach, offering wet lease, contract and charter flights as well as scheduled passenger services which are sold under a Virgin Australia codeshare. While fly-in/fly-out (FIFO) operations for the resources/mining industry is still an important and growing revenue source, Alliance’s strategy to diversify revenue has been highly successful, leading to improved profitability and increased flying across multiple sectors. It also has an expanding aviation services business.

Alliance has been consistently profitable the last three years and turned an AUD26 million profit before tax in the fiscal year ending Jun-2018. Revenue increased 23% to AUD248 million while total flight hours increased by 34% to 34,612.

Alliance has quietly become the world’s largest Fokker operator, with 35 aircraft currently in service (a mix of Fokker 50s, Fokker 70s and Fokker 100s). It expanded its fleet from 29 to 33 aircraft in FY2018 and plans to another six aircraft in the current fiscal year.

“Alliance is not well known, particularly outside Australia, but has been a strategic standout in a challenging segment of the industry,”CAPA executive chairman Peter Harbison said. “Alliance’s success proves there is still room for small regional airlines that are flexible and innovative.”

The Start-up of the Year award is for the past year’s airline start-up that has been the most innovative and had the greatest impact on the industry since launch.

flyadeal, a new fully owned subsidiary of the Saudi Arabian Airlines Corporation, was selected for its highly successful launch and innovative marketing strategy

flyadeal commenced operations in Sep-2017 and had already carried over 2 million passengers. The LCC currently operates eight A320s to eight domestic destinations and is close to finalising an order for up to 50 aircraft, positioning it for rapid growth over the next several years.

flyadeal is already the third largest domestic competitor in Saudi Arabia and is preparing to launch regional international operations in 2019. Long haul services are also under consideration for the medium term.

flyadeal decided to pursue a pure low cost model – becoming Saudi Arabia’s only pure LCC – aptly recognising the market was ready for a a true LCC following the introduction of a more liberal regulatory environment. The model has worked, stimulating demand and capturing high load factors from the first day with a strong following particularly among young Saudis. flyadeal’s marketing campaigns successfully educated customers of its low fares no frills approach and resulted in very strong brand recognition.

“flyadeal is off to great start and is already succeeding in a challenging market where others have failed,”CAPA executive chairman Peter Harbison said. “The new LCC is poised for future rapid growth given its strong position in Saudi Arabia’s rapidly growing market, where there is huge pent up demand at the bottom end, and its affiliation with a reinvigorated Saudia.”

This is awarded to the airport with over 30 million annual passengers that has been the biggest standout strategically, has established itself as a strategic leader, and done the most to advance the progress of the aviation industry.

Incheon Airport was selected for the successful opening of Terminal 2, which provides further customer service improvements including for transit passengers and cements Incheon’s status as one of the leading hub airports in the world.

Terminal 2 opened in Jan-2018, just ahead of the 2018 Winter Olympic Games which South Korea hosted. The spacious high-tech terminal is the new hub for Korean Air and its SkyTeam partners.

Incheon’s Terminal 2 lifts the airport’s capacity to 72 million annual passengers and further upgrades are planned to increase capacity to 100 million passengers by 2023. Incheon handled 62 million passengers in 2017, an increase of 8% compared to 2016. Incheon could reach 70 million passengers this year, having recorded 11% growth through the first three quarters. Traffic has more than doubled since 2009, when the airport handled less than 29 million passengers.

Incheon currently has nonstop passenger flights to over 150 international destinations. Incheon has emerged as the leading hub for East Asia-North America traffic and now has 13 destinations in North America – with two more to be added in Apr-2019 as Korean Air launches Boston and Delta Air Lines launches Minneapolis. Incheon is poised for further East Asia-North America growth as Delta pulls down its Tokyo Narita hub and focuses on Incheon as part of a newly implemented JV with Korean.

“Incheon has emerged as one of the world’s best transit hubs and is now undeniably one of Asia’s leading airports,”CAPA executive chairman Peter Harbison said. “Incheon has upped its game with an extraordinary new terminal that provides an exceptional level of service and significantly improves Korean Air’s position as a leading network airline.”

This is awarded to the airport with over 10 million annual passengers that has been the biggest standout strategically, has established itself as a strategic leader, and done the most to advance the progress of the aviation industry.

Mactan-Cebu was selected for the successful opening of Terminal 2, which provides ample capacity to support international growth and offers the best airport passenger experience (by a wider margin) in the Philippines.

Mactan-Cebu’s Terminal 2 lifts the airport’s capacity from 4.5 million to 12.5 million. Terminal 2 is being used for international operations, which has grown rapidly in recent years, while the original terminal is being used for domestic flights. The terminal took only three years to build with construction beginning less than a year after the airport was transferred to a new private sector consortium consisting of India’s GMR and Philippine company Megawide.

Mactan-Cebu won CAPA’s Asia Pacific small airport of the year category in 2016, following the successful privatisation. Annual traffic reached the 10 million passenger milestone in 2017, putting Mactan-Cebu in the medium airport category. Total passenger traffic at Cebu grew at a consistent 14% clip in 2015, 2016 and 2017 and has accelerated this year, reaching 26% in the first eight months of 2018.

Mactan-Cebu’s international traffic has more than doubled since 2014, when the airport handled only 1.7 million international passengers. International traffic grew 29% in 2017 to 3.1 million and is on pace to exceed 5 million this year following 65% growth through the first eight months.

All three main Philippine airline groups have been pursuing rapid expansion at Cebu, which they are now using the airport as an alternative hub for transfer traffic. The airport also has attracted eight new foreign airlines over the last three years and is currently served by 16 foreign carriers. Mactan-Cebu’s network has expanded rapidly and currently consists of 24 international and 16 domestic destinations.

“Mactan-Cebu has done it yet again by demonstrating strategic leadership in Asia’s dynamic airport sector,”CAPA executive chairman Peter Harbison said. “The opening of the new international terminal follows a highly successful privatisation, positioning the airport for rapid growth and making Mactan-Cebu a model for other airports in the Philippines and throughout Asia as potential PPP opportunities are evaluated.”

This is awarded to the airport with less than 10 million annual passengers that has been the biggest standout strategically, has established itself as a strategic leader, and done the most to advance the progress of the aviation industry.

Senai Airport was selected for its leading role in using new biometrics technology and its support of the LCC model, which has driven rapid growth.

In early 2018 Senai became the first airport in Asia to use biometric facial recognition technology, providing a seamless self-service travel experience from check-in to boarding. Senai is the trial airport for AirAsia’s Fast Airport Clearance Experience System (FACES), which offers AirAsia passengers the opportunity to use cutting edge biometrics technology at self-boarding gates. By embracing the new technology, Senai has improved customer service and efficiency, enabling the airport to accommodate further rapid growth.

AirAsia is the largest airline group at Senai and currently accounts for nearly 80% of total seat capacity, including 86% of international capacity and 76% of domestic capacity. Senai has emerged as one of AirAsia’s fastest growing hubs and the group now operates 17 routes from the airport.

Senai overall now has 19 routes, including 12 domestic and seven international links. Passenger traffic has nearly tripled over the last six years, from only 1.4 million in 2012 to a projected 3.5 million in 2018. The airport handled 3.1 million passengers in 2017 and has recorded growth of at least 10% every year since 2013. International traffic has grown from only 17,000 passengers in 2012 to 444,000 passengers in 2017.

Senai has been privately owned since 2003 and is the only airport in Malaysia outside the Malaysia Airports portfolio. It has grown faster than the Malaysian market average the last six years. Senai is located near the southern Malaysian city of Johor Bahru and is less than 50km from Singapore. While an earlier strategy involved it targeting passengers heading to or from Singapore, Senai in recent years has successfully focused on the local market, attracting several new LCC services which have helped stimulate demand.

“Senai has had tremendous growth and has emerged as a leader in airport technology while operating in the shadow of much larger KLIA and Singapore Changi,”CAPA executive chairman Peter Harbison said. “Senai has developed a close win-win relationship with AirAsia, positioning it for more rapid growth and providing a model for other small airports in the region seeking to attract LCC hubs.”