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CAPA Global LCC Summit

Singapore, Singapore
25-26 Feb 2019

Aircraft Choice: How new generation aircraft are enabling new growth opportunities

New generation aircraft offer game-changing economics and range for LCCs. In the narrowbody space, several LCCs are now operating or have on order new generation narrowbody aircraft on long haul routes.

Aircraft 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.

  • What examples of implementation of new aircraft types has been successful for LCCs around the world?
  • What opportunities still exist for LCCs to tap into new aircraft types?
  • Will Asian LCCs follow European LCCs in using new generation narrowbody aircraft on long haul routes
  • 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 LCCs compete with full service carriers?
  • Can fuel efficient ultra long haul aircraft overcome the inherent cost challenges of ultra long haul routes?
  • What new technology will assist LCCs in further growth?
  • How LCCs can leverage on technology to improve business performance and operational efficiency?

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

  • Airbus, Head of Marketing Asia & North America, Joost van der Heijden
  • Collins Aerospace, Head of Sales, Asia Pacific, Stephen Robinson
  • GECAS, Vice President Product Strategy, Damien Trottier

NextGen Long Haul: Remaking traditional network planning

New aircraft technology and evolving passenger preferences have opened the door for low cost long haul operations. What were previously niche city pairs are becoming increasingly mainstream.
As the low cost long haul model moves to prove its viability, several characteristics begin to emerge. These include the model’s hybridisation – and therefore the market profiles of city pairs served. 
They also relate, inevitably, to the impact on traditional full service long haul operations and on the very nature of the route network planning structures of the new operators.

  • What is the profile of the successful low cost long haul route?
  • How do low cost long haul operators establish and develop their hubs?
  • How important is finding the right partner to feed traffic at the “other end” of the long haul route?
  • What distinguishes low cost long haul operators from their full service peers?
  • What are the differences between network planning criteria of independent LCCs compared with LCCs that are part of a larger group operation?
  • How do the competitive characteristics of independent LCCs compare with those of full service subsidiaries?
  • How are full service airlines competing on long haul routes with the new low cost operators?
  • What lessons have been learnt to date about low cost long haul operations?

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

Panel:

  • AirAsia X Malaysia, Chief Executive Officer, Benyamin Ismail
  • Boeing Commercial Airplanes, Director, Commercial Marketing, Wendy Sowers
  • Scoot, Chief Commercial Officer, Vinod Kannan
  • Swoop, President, Steven Greenway

As LCCs move up the yield curve, even as far as seeking corporate travel contracts, they move further away from the bare bones low cost operation and begin to resemble their FSC counterparts. Many now offer network connectivity, targeting business travellers and going long haul, adding to cost and complexity. Meanwhile FSCs are taking on many of the characteristics of LCCs, notably through product unbundling and discount pricing strategies, especially on short to medium haul routes, thus increasingly challenging the hybrid LCCs.  

  • What characterises a “pure” LCC? Are there any left? 
  • Aircraft type and configuration 
  • Aircraft and crew utilisation  
  • Pricing and distribution 
  • How do experiences of the LCC business model vary in emerging vs established markets?  
  • Can traditional “ultra” low cost short haul point to point operations still guarantee success, where full service airlines are reducing costs and maintaining high yields? 
  • Is it inevitable that LCCs move upstream as they become older and as new competition emerges? 

Centre for Aviation, Executive Chairman, Peter Harbison

Distribution and digital transformation: The impact of NDC on the LCC market
New distribution models and IATA NDC specifically have been the topic of conversation for a number of years now, but have largely been seen as the domain of the Full Service airlines. However, the standard is not limited to this airline model or to IATA members, so why should Low Cost Carriers care about these developments in the industry? 
This panel will explore how these development present both opportunities and threats for LCCs as they compete with each other and FSCs and how they present unique opportunities for new forms of industry cooperation.

  • 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: Travelport, Global Head of Air, Damian Hickey

Panel:

  • American Express Global Business Travel, General Manager Singapore & Thailand, Sanghamitra Bose
  • IATA, Director Industry Distribution Programs, Yanik Hoyles
  • MW Travel Consultancy, Principal, Martin Warner
  • How do LCC subsidiaries work?
  • What challenges of the parent-child complex exist?
  • What opportunities exist to drive growth?
  • How can LCCs capture new travellers and meet their expectations?
  • What LCC selling opportunities are successful and what new modes exist?
  • How can airport’s assist in ensuring success?

Moderator: Korn Ferry, Senior Client Partner, Asia Pacific, Torbjorn Karlsson
Panel:

  • Caravelo, Chief Commercial Officer, Jonathan Newman
  • flyadeal, Chief Executive Officer, Con Korfiatis
  • London Stansted Airport, Chief Commercial Officer, Aboudy Nasser
  • T.B.L., Director, Executive Officer, Hiroyuki Uehara

CAPA India, Director South Asia, Binit Somaia 

Airports increasing working in a highly collaborative fashion with LCCs to win and retain air services. How are LCCs different to say attracting a full service carrier or a carrier from a key growth market like China or India.

  • What lessons can be learned from airlines and airports who have succeeded in this?
  • How can airports service the evolving needs of LCCs?

Moderator: ASM, Senior Vice President, Tony Griffin
Panel:

  • Budapest Airport, Chief Commercial Officer, Kam Jandu
  • Genki International Partners, Executive Chairman & Managing Director, Andrew Cowen
  • GMR Airports, Advisor, Tan Sri Bashir Ahmad
  • London Stansted Airport, Chief Commercial Officer, Aboudy Nasser

Low cost long haul operators are establishing partnerships with short haul low cost airlines as a means of expanding their network breadth and supporting their growth aspirations, as recently demonstrated by Norwegian’s tie up with easyJet. For long haul operators, connecting traffic is critical in scaling sustainably, especially as very few long haul destinations generate enough demand to justify year round capacity, while their partners benefit from additional traffic growth in short haul markets. Legacy carriers, who have long ceded competitive ground to short haul LCCs, could see history repeating itself as long haul-short haul LCC partnerships gain more momentum and disrupt full service carriers’ long haul networks.

  • How do long haul-short haul LCC partnerships enable growth and scale?
  • Is partnering with a short haul LCC the best way for low cost long haul operators to expand their network?
  • Are these new partnership arrangements set to disrupt network carriers’ long haul operations?
  • How seamless are self connecting platforms and virtual interlining? What role can airports play in enabling connectivity?
  • In which markets do long haul-short haul LCC partnerships proliferate?
  • Can long haul low cost carrier operate as stand alone entities without short haul partners?

Moderator: Skylight Aviation, Managing Partner, Steven Dickson
Panel:

  • Air Black Box Company, Head of Product, Timothy O’Neil-Dunne
  • CAPA - Centre for Aviation, Advisor, John Thomas
  • GMR Airports, Advisor, Tan Sri Bashir Ahmad
  • Kiwi.com, Chief Executive Officer, Oliver Dlouhy
  • SATS, Senior Vice President Sales & Marketing, Bob Chi
  • Features need to be considered in funding new and established LCCs?
  • Which funding models are most attractive to LCCS?
  • What roles have the OEMs played in LCC expansion?
  • Are markets large enough to support all the new orders?

Moderator: CAPA - Centre for Aviation, Advisor, John Thomas
Panel:

  • BNP Paribas, Head of Aviation Asia Pacific, Pierre Briens
  • BOC Aviation, Head of Strategy & Market Research, Peter Negline
  • GECAS, Vice President Marketing, Moushumi Kirtania
  • What expectations do corporate travellers have for an LCC?
  • What do corporate travel buyers look for when partnering with an LCC?
  • How does an LCC contract differ from full service carriers?
  • What can LCCs do to ensure they are included in corporate programmes?

Moderator: ACTE, Regional Director, Asia, Benson Tang
Panel:

  • Autodesk, Travel Manager - Asia Pacific, Adriana Nainggolan
  • Corporate Travel Management, General Manager, Eugene Tan
  • Rio Tinto, Global Head - Travel & Expense, Michael Molloy
  • Travel Bridge, Director, John Holden

Perspectives on building a LCC in modern Saudi Arabia 
flyadeal, Chief Executive Officer, Con Korfiatis

AirAsia X Malaysia CEO Benyamin Ismail talks about the airline’s decision to postpone delivery of its first A330-900neo to 2Q2020 and lingering concerns with the Trent 7000 engine. AirAsia X announced in Jul-2018 an increase to its A330-900neo from 66 to 100 aircraft and that deliveries would start in Oct-2019. However, AirAsia X is now planning to order around 75 aircraft. While the first aircraft from the order and for Malaysia has been delayed, the group’s Thai affiliate plans to take two leased A330-900neos in 2Q2019.

Japan Airlines VP strategy development Hiroyuki Uehara discusses the strategy of the group’s new long-haul low-cost airline, including plans for developing the fleet and network. Mr Uehara has been leading JAL’s long-haul low-cost project since it began in 2017. On 8-Mar-2019 (10 days after this interview was filmed) JAL announced the new airline would be branded ZIPAIR Tokyo and that Bangkok and Seoul would be the first destinations. ZIPAIR is preparing to launch services in 1H2020 using two 787-8s. Mr Uehara said the new airline plans to add two aircraft per year and begin long haul flights in 2021. The first two aircraft will be retrofitted to a high density two class configuration in 2H2019.

Real yields are undergoing inexorable declines as air travel has become commoditised. Airlines have counted this trend by unbundling and offering an array of ancillary services, which can account for 30-40% of revenue, but the question remains, how do airlines unlock new revenue streams? 

Personalisation is not so prone to commoditisation; how do airlines get it right?

Primer: Amazon Web Services, Head, Worldwide Business Development - Travel, Massimo Morin

Moderator: APEX, Chief Executive Officer, Joe Leader

Panel:

  • Amazon Web Services, Head, Worldwide Business Development - Travel, Massimo Morin
  • Bluebox Aviation Systems, Chief Executive Officer, Kevin Clark
  • Farelogix, Director, Asia Pacific, Mark McDonald
  • Volantio, Chief Executive Officer, Azim Barodawala

The Airline Passenger Experience Association (APEX) believes in-flight cameras will enable improved passenger service in the future with explicit customer permission, however believes privacy is paramount.

Amazon Web Services, Head, Worldwide Business Development – Travel, Massimo Morin

Collins Aerospace is a leader in technologically advanced and intelligent solutions for the global aerospace community. Head of Sales Asia Pacific Stephen Robinson discusses the impact Collins has on the entire aviation eco system covering ground and in the air. By improving data connections from aircraft, Collins is able to pre-empt safety issues, minimise on ground time and improve passenger experience.

Volantio brings post-booking revenue and capacity optimisation opportunities to airlines all around the world. The technology enables airlines to continue to react to fluctuations in demand on flights even after customers book and therefore optimise both unit revenue and capacity on flights after customers have purchased a ticket. Volantio CEO Azim Barodawala discusses real life examples of carriers using the tools and the positive impacts it can have on customer experience.

American Express recently announced it had acquired Mezi, a personal travel assistant app that helps consumers plan and book trips. The Mezi app allows travellers to simply message their requests for flights, hotel or restaurant reservations, and Mezi provides recommendations and makes travel arrangements at the customer’s request. Founded in 2015, Mezi uses artificial intelligence (AI) and human expertise to personalise the online travel discovery and booking experience. We caught up with American Express, VP, Travel Strategy & Partnerships, Johnny Thorsen to get an update on the acquisition.