CAPA Australia Pacific Aviation & Corporate Travel Summit

CAPA – Centre for Aviation, Executive Chairman, Peter Harbison

Sydney Airport, CEO, Geoff Culbert

BIS Oxford Economics, Head of Australia Macroeconomics, Sarah Hunter

There has never been any surface access plan that relates to serving the proposed new airport.
Today there is a motley selection of road and rail plans more designed to meet local transport needs than to service the airport effectively.
The Federal/State division of responsibilities is likely to produce a similarly dysfunctional rail link to Sydney Airport’s – unless the Federal and State governments step in to provide rail links that are purpose built to serve Badgery’s Creek.

Transportation Associates, Director, Peter Thornton

Cebu Pacific chief operations adviser Rick Howell describes the LCC as an e-commerce company with aeroplanes as it embraces technological change and builds on its strong brand presence in the Philippines to grow its international network. He notes how capacity is growing between the Philippines and Australia and the airline’s own activity in this competitive country market that is home to a notable Filipino diaspora. But, it is not just about heritage and VFR demand and he discusses how the airline is trying to sell the Philippines an alternative to Bali as a leisure destination.

Regional Express executive chairman The Hon John Sharp highlights that airport owners do not understand the difficulties of regional aviation and charge too much for the services they offer. He highlights that even in markets where it is the sole operator, it does not hold a monopoly due to strong competition with the motor car and urges a review of airport charges and services. He also discusses that while pilot training is a “cost centre” its training academy makes pilot training a potential profit centre and a potential “big export earner” for Australia.

American Express, Vice President  – Loyalty & Partnerships, Global Consumer Services Group, Robert Tedesco

Virgin Australia Group, Managing Director & CEO, John Borghetti

Travelport, Global Head of New Distribution, Ian Heywood

Tigerair Australia, CEO, Merren McArthur

Jetstar Group, CEO, Gareth Evans

Hear about the new route opportunities opening for Australian travellers LATAM Airlines Group, Senior Vice President of Global Sales, Nicolás Goldstein

Hawaiian Airlines, President & Chief Executive Officer, Peter Ingram

• Understanding the latest market dynamics, macro trends, realignment and consolidation – and the implications for Australia/South Pacific
• After aviation’s best two years, will the good times continue, or is a downturn looming?
• Building sustainable access: are bilaterals putting a constraint on growth in markets where more capacity is clearly needed?
•  As full service airlines and LCCs blend their models, what new dynamics will take shape?
• What are the specific challenges remote communities face in accessing aviation services?

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

• Agri-nomics Australia, ‎Director, Barry Parsons
• International Air Services Commission, Chair, Ian Douglas
• Regional Express, Deputy Chairman, John Sharp
• Tourism & Transport Forum, CEO, Margy Osmond
• VietJet, Vice President – Commercial, Thanh Son Nguyen

After decades of indecision, the Australian Government in 2017 pressed ahead with the decision to build Sydney’s second airport, providing much needed capacity to accommodate the anticipated influx of 76 million ppa by 2030.

NSW Premier Gladys Berejiklian recently told overseas investors and infrastructure companies, the airport represents a “once in a century opportunity”. But, aside from the federal government’s investment in the airport itself, there is effectively no dedicated airport access planned at this stage. Most of the “planning” relates to satisfying local needs not directly related to the optimal functioning of the airport.

However, given the potential growth projections for the Sydney basin (and the cost to the economy of not providing adequate infrastructure), it is critical that the airport serves as a genuine alternative to Kingsford Smith and does not become a localised regional airport with inadequate surface infrastructure links.

• Making provisions for surface connectivity: Does the airport need a fast rail link?
• Is discussion of a proposed aerotropolis realistic?
• Financing the infrastructure project
• How is the airline customer profile expected to evolve – will the airport remain primarily focused on the low cost market?

Moderator: L.E.K. Consulting, Partner, George Woods
Panellists:

• Board of Airline Representatives of Australia, Executive Director, Barry Abrams
• Sydney Business Chamber, Director, David Borger
• Transportation Associates, Director, Peter Thornton
• Western Sydney Airport, CEO, Graham Millet
• Western Sydney Leadership Dialogue, Chair, Christopher Brown

The South Pacific aviation market has enjoyed relatively benign operating conditions in the last couple of years, allowing the region’s carriers to record some of its best ever results. Major inbound markets are performing well and bringing solid traffic growth. Against this backdrop, Australia/New Zealand carriers are exploring the latest aircraft technology, opening up new city pairs, realigning their hubs and reviewing their partnership strategies on key markets such as the Trans Tasman and Trans Pacific. But as we head deeper into the year, changing macroeconomic conditions, rising fuel prices and growing trade protectionism could cause major headwinds in the industry. What is the outlook for Australia and New Zealand aviation for the medium term and what new dynamics will shape?

From voice based commerce during the booking process, to automated check in and inflight wi fi, technological innovations are enhancing the travel experience. Biometrics technology are set to obliterate the physical barriers faced by travellers at all major airport touchpoints such as check in, immigration and security; electronic tagging has enabled real time tracking of baggage; and AI, virtual assistants and chatbots are being deployed to manage myriad customer queries such as booking flights and aircraft delays. Airlines and airports that are investing in process improvements stand to gain from a more engaged and loyal customer base.

• How does the whole travel ecosystem view the passenger journey? How can each player work together to personalise and enhance the traveller journey?
• 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?
• Passenger processing: Assessing the technologies and processes available to improve operational efficiencies and asset productivity eg with border processing, facial recognition, retinal scanning, fingerprint ID, digital tokens and preclearance
• Leveraging predictive analytics: how to turn big data into actionable information that intelligently understands and delights the customer (and enhances revenue)

Moderator: Festive Road, Principal Consultant, Mike Orchard
Panellists:

• FCM Travel Solutions, General Manager, Melissa Elf
• Inmarsat, Regional Vice President, MEASA, Ben Griffin
• SITA, Regional Director, North Asia and Pacific, Jay Youlten
• The Lido Group, CEO, Steve Mackenzie

Australia Tourism & Transport Forum chief executive officer Margy Osmond highlights there is a need to improve air travel access “across the board” and that Australian state governments could take a much more enlightened view of supporting and subsidising regional air activity, as well as looking at charges at regional airports. She notes that while Chinese tourism represents an “amazing opportunity for Australia”, it is important not to lose sight of the wider Asian market and the “resurgent” high yield markets of North America and Europe.

South Australian Tourism Commission chief executive officer Rodney Harrex describes North America and in particular the US market as the state’s primary “aviation gap” with visitors arriving via cities on Australia’s and diluting visitor expenditure in the state. He acknowledges nature tourism and the state’s food and wine proposition  are key attractions and notes that by working in partnership with Adelaide Airport, the business community and other areas of government to identify the right airline partners, that the state has already exceeded its 2020 Chinese arrivals target.

Adelaide Airport managing director Mark Young highlights how a targeted international marketing campaign with other stakeholders is helping to deliver enhanced air connectivity, both through new flights and increased frequency and aircraft switches on existing routes. He highlights how the airport works as an inbound and outbound gateway to Adelaide, provides an update on the new airport hotel, notes how LCCs could play a key role in reducing customer leakage and acknowledges how technology is changing the airport experience.

AirPlus International managing director and chairman of the executive board Patrick Diemer highlights how saving money is at the heart of corporate travel whether you are a provider or a consumer of services. He outlines how travel managers are looking to incorporate savings throughout the business travel process and how virtual card payments will ease the woes of post-trip expense claims.

Travelport global head of new distribution Ian Heywood highlights that NDC is making clear progress, and after years of discussions we are now starting to see the industry take action. He details what exactly NDC means for the industry, how it works and the benefits for airlines and consumers. He notes how IATA’s ‘Leaderboard’ of airlines for NDC, which was launched with 20 airlines, has grown to 21 as Qantas has joined the list, and how it is working to a target for each carrier to deliver at least 20% of volume through NDC-capable application programming interfaces by 2020.

Hawaiian Airlines president and chief executive officer Peter Ingram highlights that the carrier has been growing earnings in a way that reflects its strategy is working and says the airline now provides a network of services that better reflects demand. He discusses how the A321neo has changed the way the airline has been able to look at capacity, frequency and scheduling; how the airline has been targeting expansion in Asia, especially in Australia, New Zealand and Japan, and why the latter and South Korea could be key future growth markets.

LATAM Airlines Group SVP global sales Nicolás Goldstein highlights the airline’s activity in the South Pacific region and reveals aspirations to grow its Santiago – Melbourne service to a daily schedule. He highlights how passengers out of Australia are flying beyond Santiago across all of South America, how LATAM is working to expand its global network (although Asia is not on its short-term radar) and why corporate demand and its strong correlation to GDP could see a stronger focus on the faster rising leisure market.

In an increasingly digitalised economy, airlines understand the need to innovate in order to cater to growing traveller expectations centred on mobility, seamlessness and personalisation, particularly in relation to the booking and shopping experience. This is not an easy task in the wake of decades of legacy thinking and antiquated distribution systems preventing  airlines from becoming true end to end travel providers. While new industry standards like IATA’s NDC have mapped out a pathway to better airline retailing and –  and indeed the three major GDS and some major airlines are now adopting the standard – there is still a notable chunk of smaller airlines, LCCs, OTAs and travel content aggregators who have yet to undergo full NDC implementation. Are we seeing a new ‘haves’ and ‘have nots’ emerging? And, if we are, who is going to be offering services to bridge this gap – will it be the GDS and IT providers, other airlines or speciality providers? Or is this an opportunity for the new disruptive players to get a slice of the distribution pie?

• Why is digital innovation strategically important to the airline business?
• Are we seeing a growing gap between the digitally innovative airlines and those without a digital drive?
• How does airline.com compete in the era of conversational converse and new channels like voice, Google Assist and Amazon Alexa? Are there other distribution channels which airlines are underutilising?
• Unlocking the true potential of disruptive players and technology such as blockchain: just how is it going to usurp the existing value travel distribution chain?
• Digital and virtual payments – how are these new payment solutions enabling travel mobility and at what cost?

Moderator: Web In Travel, Founder, Siew Hoon Yeoh
Panellists:

• Amadeus, Regional Director Airlines South Pacific , Sunil Joseph
• HRG Worldwide, Managing Director, David Lorimer
• Travelport, Vice President Asia Pacific, Air Commerce, Chris Ramm

Tourism Tasmania director aviation & access development Hans van Pelt highlights how a collaborative approach is key to developing enhanced connectivity. He looks at how domestic and international demand into Tasmania is growing and how it is not just about getting new capacity into the island state, but ensuring that capacity is being delivered in the right markets with regular frequencies and onward codeshare and interline connectivity.

Inbound tourism is Australia’s second largest export industry, with favourable macroeconomic conditions, low fuel prices and a depreciating dollar providing the ideal conditions for continued growth. But increasing awareness and stimulating tourism demand is a perennial challenge faced by Australia, which is hampered by the tyranny of distance and high costs relative to neighbouring destinations.

• Does Australia have the capacity and infrastructure to meet tourism demand? Is there an oversupply or undersupply of travel services?
• Are operators fully educated on how best to market and cater for inbound markets?
• What are the facilitation challenges and issues around border protection and visas?
• Does Australia have any competitive advantages that can be leveraged in its destination marketing efforts?
• What are the opportunities around regional dispersal of visitors?
• Raising brand awareness in the digital age – how is industry using data in a smarter ways to convert awareness into actual bookings?
• Can industry collaboration improve messaging and funding available to stimulate inbound markets?

Moderator: Tourism Futures International, Managing Director, Bob Cain
Panellists:

• South Australian Tourism Commission, Chief Executive, Rodney Harrex
• Tourism Australia, Managing Director, John O’Sullivan
• Tourism WA, Chairman, Nathan Harding

The travel industry has made a major breakthrough following  industry agreement to adopt NewGen ISS from Mar-2018, which includes amendments to IATA Resolution 890 allowing agents to pay for tickets with their own payment cards, and subsequent creation of the Transparency in Payments framework, put in place to enable airlines to gain both greater visibility over the costs of using different payment payments and greater control over payment methods accepted through the agency channel. Other than heralding efficiency improvements in processes and payments for agencies, these changes allows airlines to drive down costs by removing acceptance of high interchange payment methods, and incentivises payment providers to create low cost, innovative forms of payment. It also potentially allows airlines to build, create and establish B2C relationships, for example by working with card providers to merge data sets and gain full visibility over the value of a corporate customer’s spend. But what’s the true benefit of these changes for both agencies and airlines? This debate will unpack the implications of these industry reforms in the Australian context.

• Will the industry collaborate to make the most of these changes?
• What does TIP implementation look like in practice?
• Do suppliers have the capability to accept newer, lower cost payment methods?
• How are agents amending their payment strategies in light of IATA Resolution 890? Will there be much of a balance shift between use of traditional cards and alternative payments, or the use of agent cards over individual consumer/corporate cards, IATA easyPay?
• What is the likelihood of Australian agencies fully participating in adopting IATA Resolution 890? Are there any obvious benefits – to both the agent and the airline?
• What are the Risks for Airlines? How would risks be managed? Are the airlines willing to allow accept this new form of debt? Who is liable for unpaid debt?
• What are the opportunities for airlines to strengthen their B2C relationships and track corporate spend in the new payment landscape?
• How will these forms of payment impact NDC/One Order?

Moderator: The Initiatives Group, Managing Director, Lance Blockley
Panellists:

• AFTA, Chief Executive, Jayson Westbury
• Corporate Travel Management, Global Head of Partnerships, Scott Ward
• Mastercard, Director, Gregor Lochtie
• Paypal, Director, Head of Enterprise Business, Anthony Drury
• Travelport, Vice President Global Payment Solutions, Alexandra Fitzpatrick

Australasia’s airports and airlines exist in an uncomfortable dichotomy. Each relies on the other, yet both have accused the other of taking advantage of market power, whether it's charging excessive airport fees or inflating airfares on regional routes, depending on who is levelling the accusation. 

Despite a number of Productivity Commission reviews supporting the current regulatory framework, A4ANZ claims that airport charges have provided one of the biggest roadblocks to fleet renewal and route development and that airports have abused their monopolistic power to capture “a disproportionate share” of Australia’s aviation growth, citing Frontier Access reports . 

AAA argues such claims “ignored the robust negotiations between airlines and airports that take place across the country to deliver runways, terminals and technology to meet passenger needs”. The airport body has also expressed concerns over the airline industry’s market power, arguing “the domestic airline duopoly disadvantages the passenger – particularly in the regions”.

In this debate both A4ANZ and AAA will be given equal opportunity to share their views on the economic reality in the post airport privatisation environment and what this has really meant for airlines, airports and - most importantly - the consumer.

Moderator: CAPA - Centre for Aviation, Executive Chairman, Peter Harbison
Panellists:

• Airlines for Australia & New Zealand, CEO, Alison Roberts
• Adelaide Airport, Managing Director, Mark Young
• Australian Airports Association, Chief Economist, Warren Mundy
• Qantas Airways, Group Executive, Government, Industry, International, Environment, Andrew Parker