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CAPA LCCs in North Asia Summit

Seoul, South Korea
11-12 Jun 2018

CAPA – Centre for Aviation, Executive Chairman, Peter Harbison

Peach Aviation, Representative Director & CEO, Shinichi Inoue

LCCs are constantly looking at finessing their retailing and merchandising strategies – whether it’s during the booking phase, pre flight or onboard, with relevant, timely offers that are easily accessible (preferably via mobile) and easy to pay for. This is especially important in today’s digitalised environment, where onboard connectivity is virtually a must have and almost as critical for the traveller as getting to the destination. How can airlines make full use of their connected and captive audience – and generate healthy ancillary revenues in the process?

  • How will the ancillary strategies of the region’s LCC continue to evolve?
  • How is technology enabling the growth of the airline as retailer?
  • Beyond a la carte pricing, baggage and meals, what are some more creative ways of achieving ancillary revenue?
  • Have North Asian LCCs in this region adapted their ancillary revenue models to reflect cultural expectations? On the flipside, what are they doing to attract international inbound passengers?

ModeratorKorea Aerospace University, Professor, Moon Gil Yoon
Panel:

  • Bluebox Aviation Systems, CEO, Kevin Clark
  • Inmarsat, VP Aviation, MEASA & APAC, Ben Griffin
  • TravelSky, Director Marketing & Sales of Quick PRS of International Department, Lars Gäbler

AirAsia, Chief Global Affairs Officer, Juergen Keitel

The distribution ecosystem has changed rapidly over the past few years owing to a proliferation of intermediaries capitalising on new technologies, the emergence of new low cost channels and the implementation of the NDC standard. As well, increasing consumer expectations for personalised service offerings means that airlines need to innovate to capture market share, and it goes without saying that this involves leveraging predictive analytics and data in an intelligent way. What are the region’s LCCs doing to exploit the opportunities presented by the new distribution channels? Who are the new players and how will their emergence influence distribution strategy?

ModeratorWeb in Travel, Founder, Siew Hoon Yeoh
Panel:

  • Expedia Group, Director, Transport Partner Services, Northeast Asia, Satoru Arai
  • Playwings, Founder, Curtis Oh
  • Rockwell Collins, Principal Global Program Manager, Sajin Mohamed
  • TideSquare, CEO & Founder, Min Yoon
  • Travelport, Senior Commercial Director, Chris Ramm
  • Trazy, Co-Founder & CMO, Kristine Hanuhl Um

It’s no secret that aviation is still very much a boys club, with only a handful of the world’s airlines headed up by female CEOs. Still, there’s been a notable increase in the number of women executives who have risen through the ranks of Asian aviation, taking on roles in a wide range of areas from commercial through to operations. Hear from an array of women about their personal experience in this industry and how they are championing diversity in the workforce.

ModeratorWeb in Travel, Founder, Siew Hoon Yeoh
Panel:

  • Airbus, Senior Vice President Sales Japan, Jean-Pierre Stainnack
  • ANA, Senior Director, Mio Yamamuro
  • HK Express, Commercial Director, Jonathan Hutt
  • Kayak, Vice President, APAC, Amy Wei

Partnerships of various permutations, whether they are cross border JVs, alliances with full service carriers or LCCs forming their own alliances, are an increasingly important feature of the LCC landscape. Full service carriers and the global alliances they are part of see merit in partnering with LCCs given their potential to provide access to lucrative domestic markets. Within Asia specifically, the cross border JV model has allowed major LCC groups such as AirAsia, Jetstar, Lion Air, and to a lesser extent VietJet, to accommodate foreign ownership restrictions by taking branded minority stakes in local airlines. Some LCCs have even formed their own groupings to take advantage of cross selling opportunities. What are the opportunities and limitations of each partnership model from a cost, revenue, traffic and brand awareness perspective? Under a multi airline group structure, how does the parent company strategically manage each of their airline brands? Can a non aligned LCC survive without being part of either a branded group or LCC alliance?

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

  • ANA, Senior Director, Mio Yamamuro
  • HK Express, Commercial Director, Jonathan Hutt
  • Kiwi.com, Founder & CEO, Oliver Dlouhý
  • Spring Airlines, Chairman, Stephen Wang
  • Uriel Aviation Holdings, Vice Chairman, Andrew Cowen

After first coming on to the scene in 2012, Japanese LCCs have steadily increased their share of the market, and now carry 1 in 10 domestic passengers – a significant achievement when viewed in the context of infrastructure constraints and the stickiness of Japanese consumers to the full service incumbents. The country’s LCCs may be seeking greener pastures in international markets but overlapping operations and the recent addition of a fifth LCC in the form of AirAsia Japan has brought up various consolidation scenarios and questions of whether the market is saturated. Is there a need for rationalisation? What form would this take? What are the potential partnership opportunities between Japan’s LCCs?

Moderator: MIT Scale Network Ningbo, Associate Professor, Chikage Miyoshi
Panel:

  • Jetstar Japan, Chief Executive Advisor, Nick Rohrlach
  • Peach Aviation, Chief Corporate Planning Officer, Satoru Endo

Start-up Air Philip is a regional operator in Korea. Strategy and Planning Manager Sangyun Kim discusses ERJ145 and ERJ175 deployment plans, bases in Gwangju and Muan, and avoiding competition with Korea’s high-speed train network. Air Philip expects significant growth opportunities if Korea allows regional airlines to use larger aircraft.

Airbus SVP Sales Japan Jean-Pierre Stainnack has key milestones coming up with the delivery of ANA’s first A380 and then JAL’s A350-900s and A350-1000s. These will be the first non-A320 Airbus aircraft based in Japan. Airbus expects more A350-1000 sales as the 777-300ER retires. Airbus believes the slightly smaller size of the A350-1000 compared to the 777-9 makes the A350-1000 more suitable for risk-averse airlines looking for a large twin-jet.

Jetstar Japan chief executive advisor Nick Rohrlach discusses the airline’s momentous summer 2018, which marks the sixth year of operations, the rounding out of its Kyushu network, and aircraft growth. Looking medium-term, the Peach-Vanilla integration makes for a larger combined airline but presents growth for Jetstar while Peach and Vanilla integrate. Jetstar Japan would like to partner with Japan Airlines’ new long-haul LCC.

Japan Airlines in summer 2020 will launch a new long-haul LCC. VP Strategy Development Hiroyuki Uehara discusses summer 2018 business registration, the plan to invite investors to the airline, and consideration for aircraft and configuration options as well as route deployment. The airline will consider commercial partnerships with other airlines.

Bluebox CEO Kevin Clark discusses recent changes in the streaming IFE sector. From a demand perspective, passengers typically carry 1.3 devices with them and are increasingly comfortable – and prefer – using their own devices. A few years ago, streaming IFE consisted of an on-board server, access points and cabling, but Bluebox now a single, light-weight offering that does not require a supplemental type certificate.

Bombardier Head of Marketing Asia-Pacific & China Ross McKeand discusses the CSeries’ service plan with Korean Air and which regions the CSeries will be popular in. Bombardier is working to reduce the operating cost of the Q400 and is encouraged by opportunities in Asia, especially if Korea allows regional start-ups to use larger aircraft.

Korea was Northeast Asia’s first major LCC market and today remains the largest and most vibrant. This success was more by accident than design: there was no explicit policy to develop LCCs. With LCCs having created success on their own, what formal planning can be done to further grow the LCC sector? Can LCCs play a role in unlocking further connectivity between North and South Korea?

Moderator: The Chinese University of Hong Kong, Assistant Professor, Jae Woon (June) Lee
Panel:

  • Eastar Jet, President/CEO, Jong Gu Choi
  • Jeju Air, CEO/President, Seok Joo Lee
  • Korea Airports Corporation, Director, Market Development & Commercial, Jae Hee Park
  • T’way Air, Executive Vice President, Hyung Yi Kim

The 2018 Winter Olympics may have come and gone in Pyeongchang but the hard work continues for destination marketers, with the Korea Tourism Organisation aiming to leverage on extensive Games coverage to further boost awareness of the country among the event planning community. With the next few editions of the Olympics returning to Tokyo and Beijing, the region needs to not only create the capacity and infrastructure to handle the massive influx of travellers but also ensure inbound markets remain healthy in the longer term – a challenge which many event host cities have faced.

Korea Culture & Tourism Institute, Chief Researcher, International Tourism Research Division, Dr. Sung Tae Lee

There’s been a surge in new airline-airport partnerships in recent times. Korean LCCs are expanding beyond their primary bases, with T’way and Jin Air setting up additional bases in Daegu and Busan respectively. Meanwhile Japan’s secondary airports are aggressively targeting international flights, particularly Korean LCCs, as well as LCCs (and full service airlines) from elsewhere in North Asia, including China. Also, the new Hong Kong-Zhuhai-Macau bridge will provide a crucial (fast) road link between the three Pearl River Delta cities, and presents an opportunity for Macau to capitalise on Hong Kong’s growth constraints and attract more services.

  • Will North Asia’s alternative airports increase their share of LCC seats as capacity and slot constraints at primary gateways inhibit growth?
  • How can non slot constrained airports promote themselves as attractive second bases and achieve growth through tactical partnerships?
  • What can secondary airports offer to attract the region’s LCCs? And how can they coordinate efforts with local tourism authorities and other regional bodies to stimulate the market?

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

  • Eastar Jet, Vice President, Pil Je Cho
  • Ibaraki Prefecture, Executive Director, Naoki Morizumi
  • Korea Airports Corporation, Vice President, Market Development, Commercial & Global Business Division, Soon-Cheon Park
  • Sendai International Airport, CCO, Katsuhiko Okazaki
  • T’way Air, Executive Vice President, Hyung Yi Kim