sector aviation
Bangkok’s Don Mueang airport reopened just six months after it was presumed to be redundant
refresh in January. The Irish carrier is IAG’s main budget transatlantic weapon, combining pre-clearance at Dublin as a selling point with a low hand baggage- only fare point. Aer Lingus chief executive Stephen Kavanagh said the airline’s new image would reflect the airline’s ambition to be the leading value carrier across the North Atlantic”. The third, and perhaps less obvious, IAG weapon is British Airways’ Mixed Fleet crew operation, with substantially lower crew costs than the pure legacy airline and which operates nearly 40 long-haul routes. Add to this the extra row now installed in many BA Boeing 777s, taking them from nine abreast to 10 in economy, and BA has a much more combative offering. Air France has Joon, but its expansion has been on a smaller scale and new Air France chief executive Benjamin Smith is reportedly unhappy with the concept. Joon’s PR spin describes it as the “airline for millennials”, but it is really just a lower-cost brand operating some former Air France long-haul routes, and the reality is the only market segmentation most budget-conscious travellers care about is price. Against this more competitive
environment in Europe is added the rising cost of fuel, which hits long-haul specialists hardest in times of elastic demand.
Looking ahead, Norwegian chief executive Bjorn Kjos has warned: “There is no doubt that tough competition, high oil prices and a strong dollar will affect the entire aviation industry.”
What this means is the budget long-haul sector, while not imploding,
34 wtm insights winter 2018
is likely to see fewer new entrants. OAG director John Grant believes: “In a business model where an obsession with cost is crucial, then reaching a point of critical mass in aircraft, network and passenger volume is going to be increasingly difficult. If LCC growth in Europe is slowing, the same cannot be said for siaacific, but even
Norwegian has scared investors with rapid growth
here the boom is not what it might appear as, so far, the majority of traffic is intra-regional, with hina leading the way. Statistics show that China-Thailand, the largest international market from China, accounts for 10.8 million seats, with China-Japan second at 9.9 million and South Korea third with 9.4 million.
Booming Asia
China-Thailand is one of the world’s fastest-growing leisure travel markets, with Capa putting the number of air travellers to Thailand from China at around 12 million this year, compared to fewer than 00,000 in 2009. While flying times are generally less than five hours and within range of narrow body fleets, wide-body aircraft are used by carriers such as Bangkok’s NokScoot to cater for growing volumes.
The size of this market is underlined by Bangkok’s Don Mueang airport, which was planned to be redundant when Suvarnabhumi was inaugurated in 2006 but which reopened six months later. Last year, Don Mueang handled 38 million passengers, with 97% of these travelling on LCCs.
Don Mueang’s turnaround today will be another airport’s boom tomorrow as travellers venture further afield with s catering to them. The long-haul low-cost sector might be finding it difficult in some markets, but in Asia, there is far more to come.
wtm.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60
