Bangkok--23 Jan--Centre for Asia Pacific
Centre for Asia Pacific Aviation (CAPA) Executive Chairman, Peter Harbison, today warned that Asia’s major incumbent carriers risk becoming irrelevant, or even face extinction, if they fail to grasp the changes in the market occurring due to LCCs.
Opening the Low Cost Airline Congress in Singapore today, Mr Harbison stated that an aviation revolution is taking place.
“The aviation world will never be the same. Any new entrant MUST be low cost and any existing airline not heeding this message will become an ex-airline. We haven’t yet seen a major international airline shut down in this region — although Ansett Australia’s collapse was contributed to by the entry of LCCs domestically — but it will happen”, stated Mr Harbison.
Mr Harbison observed there are now a variety of airline models in Asia, where previously all were similar “department store airlines”.
“Hybrid models are evolving with characteristics specific to their own environment, like Virgin Blue, while others are taking on a special Asian characteristic, like AirAsia X and VIVA Macau. We are also seeing the rapid development of low cost long-haul models, like Oasis Hong Kong and Jetstar”.
“These hybrids are defying many of the “basic” rules. But they have one common ingredient - a passion for cost reduction”, said Mr Harbison.
Mr Harbison predicts that there will be twice as many Asian international airlines in five years than today. “Talk of the coming consolidation among airlines is a nonsense”, stated Mr Harbison.
“Who is going to consolidate? Not Singapore Airlines and Thai Airways? There will certainly be some market exits, but large scale consolidation won’t happen — it’s just too difficult and the market is expanding too fast”, he said.
Mr Harbison stated that 2007 will be an important year for liberalisation of aviation access by governments, but he warned of a growing logjam caused by government “inertia”.
“As governments recognise the political and economic benefits of liberalising, it is more a question of how we get around the sticky cobwebs of the bilateral system. ASEAN 2008 is just around the corner and most states have so far paid it little more than lip service. It needs concerted action — and quickly”.
“It’s wake up time. The only thing preventing economic expansion for hundreds of thousands of people, especially in regional centres, is the dead hand of government aviation policy. We need to shout that message at every opportunity”, concluded Mr Harbison.
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About Centre for Asia Pacific Aviation
Centre for Asia Pacific Aviation ( www.centreforaviation.com ) is a specialist consultancy group focused on the aviation industry in the Asia Pacific region. It provides advisory and information services to airlines, airports, governments, regulatory agencies and suppliers. The Centre’s headquarters is in Sydney, Australia, with regional offices in Singapore, New Delhi, Geneva and Manchester and representatives in Auckland, Bangkok, Beijing, Dhaka, Hong Kong, Shanghai and Tokyo.
Head Office, Sydney:
Derek Sadubin, Chief Operating Officer
Aurora Place, Level 36, 88 Phillip St Sydney
PO Box N777, Grosvenor Place Sydney, NSW Australia 2000
Tel: +61 2 9241 3200 Fax: +61 2 9241 3400 Email: [email protected]
Southeast Asia Regional Office:
Alice Goh, Regional Director, Southeast Asia
Tel: +65 6227 1608 Fax: +65 6532 5643 Email: [email protected]
Indian Subcontinent and Middle East Office:
Kapil Kaul, CEO Indian Subcontinent & Middle East
Tel: +91-11-3090-1466 Fax: +91 11 2370 9154
Email: [email protected]
UK/Europe Office:
Jeremy Buckle, Regional Director, UK/Europe
Email: [email protected]
David Bentley, UK Associate
Tel/Fax: +44 (0) 1706 881 560 Email: [email protected]
North America Representative
Martti Raito. Email: [email protected]
North Asia Representatives
Korea: Kyung-sup Lee. Email: [email protected]
Japan: Reiko Sonoyama. Email: [email protected]
More information is available on the Centre’s website
www.centreforaviation.com