East rivals eclipse the two other carriers in the region, Oman Air and Gulf Air, the former continues expansion in a small way – it begins a route to Tehran in September. However, Gulf Air will be forced to compete on price for the next few months in the light of Bahrain’s ongoing political conflict.
LATIN AMERICA
The big news this year has been the merger of Chile’s LAN with Brazil’s TAM to form LATAM, which will have one-third of South America’s airline capacity. The deal means that individual brands are retained, but that TAM must leave Star Alliance, of which Latin America’s other main grouping, Avianca TACA, is a member, so expect TAM to join LAN in Oneworld. One effect will be for Sao Paulo to become more of a hub for European flights, with LAN providing onward connections.
ASIA PACIFIC
The region is always dynamic, but growth here is particularly strong among the emerging low-cost carriers. This summer has seen the first international venture by a Chinese budget airline, when Shanghai’s Spring Airlines began flying to Tokyo and Bangkok. Singapore Airlines’
Low-cost carriers will have almost 20 per cent of the market in Japan this winter, a quantum leap from only a few years ago
Scoot, a long-haul budget offshoot that flies Boeing 777s with a premium economy cabin, began operating in June and will offer China’s Tianjin, plus Taipei and Tokyo.
The short-term focus here is really 72
on Japan, where low-cost carriers will have almost 20 per cent of the market this winter, a quantum leap from only a few years ago when they were locked out. More importantly, these carriers – ANA’s Peach and Air Asia Japan – began flying internationally this year and will be joined by Jetstar Japan in 2013. Although they are not on UK buyers’ radar, they will shortly begin to affect flying patterns of the legacy airlines in this region. ■
GAME CHANGER: B787 DREAMLINER
Starting this summer, Boeing’s latest aircraft will appear on routes from the UK as airlines begin taking delivery of the 787
AIR INDIA WAS DUE to pip Qatar Airways to the honour of being first to fly Boeing’s Dreamliner to Britain, but British Airways must wait until summer 2013 to take delivery of its first 787, an aircraft which cuts flying costs by 20 per cent compared to comparable types. Unlike the Airbus A380, which has been used on existing high-density trunk routes such as London to Singapore, the 787 is a game changer, as its range and economics offer the option of flying routes previously unviable with more fuel-thirsty aircraft. United Airlines, for example, will debut the aircraft next spring on the Denver-Tokyo Narita route; similarly, Japan Airlines would not have paired Tokyo with Boston before the aircraft’s appearance. Such ‘long and thin’ routes
– typically meaning around 250 passengers on a 10-14 hour trip – are the 787’s forte. We will see more unlikely route pairings, but airlines
will also use the 787 to make existing services more viable and secure them for the long-term, as the 787 can be used to manage demand when seasonal changes mean bigger aircraft make a route temporarily unprofitable. Qatar Airways, which
will take five 787s this year, plans to put the aircraft onto Doha-Perth, a route which fits into this category and which is currently operated by the much larger Boeing 777. Others will be deployed on routes to Vietnam and Japan. Another effect that the 787
will have over time will be to reduce the dominance of the world’s big hub airports. London-Tokyo is currently the only direct choice to Japan, for example, but London-Osaka may once again become viable with the 787. Similarly, some secondary cities in India and particularly China will become attractive from London once carriers bring the aircraft into their fleets.
The 787 will also enable
more carriers to emerge onto the global market. China’s Hainan Airlines, for example, will use the aircraft to launch a Beijing-Chicago route in April, the first Chinese carrier to do so. Europe will lag last in the 787 race, as LOT Polish Airlines, the first European operator, does not get its first until November. It will use this on Warsaw- Chicago from 2013. Qatar Airways will be the launch operator in the Middle East, Ethiopian Airlines in Africa and LAN in South America. The 787 will gradually appear on routes popular with UK business travellers. One factor of practical interest to them is that its comparatively small size and niche route usage means no carrier has so far fitted a first class cabin, something that will disappoint the hopeful executive but delight those holding the purse strings.