NO BACKING DOWN Industry steadfast in commitment to 50% cut in emissions by 2050 - Orient Aviation
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Vol. 27 No. 8 October 2020
orientaviation.com
NO
BACKING
DOWN
Industry steadfast in
commitment to 50% cut
in emissions by 2050
SIA pilots volunteer Cargo’s biggest challenge: Premium start-up
deeper pay cuts to distributing anti-virus taps Taiwan’s taste
save jobs vaccine worldwide for grander travel
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CONTENTS Volume 27, Issue 8
MAIN STORY
14
ORIENT AVIATION MEDIA GROUP
17/F Hang Wai Commercial Building,
231-233 Queen’s Road East,
NO
Wanchai, Hong Kong
Editorial (852) 2865 1013
E-mail: info@orientaviation.com
Website: www.orientaviation.com
BACKING
DOWN
Publisher & Editor-in-Chief
Christine McGee
E-mail: christine@orientaviation.com
Associate Editor &
Chief Correspondent
Industry steadfast in
Tom Ballantyne commitment to 50% cut
Tel: (612) 9638 6895 in emissions by 2050
Fax: (612) 9684 2776
E-mail: tomball@ozemail.com.au
North Asia Correspondent
Geoffrey Tudor COMMENT 11 Aircraft lease rollovers grinding to halt in
Tel: (813) 3373 8368
5 We hear you on climate change says industry paralysed market
E-mail: tudorgeoffrey47@gmail.com
12 Vietnam and Indonesia: Southeast Asia’s next
Photographers ADDENDUM aviation powerhouses
Rob Finlayson, Graham Uden, 6 Youthful full-service Starlux tapping Taiwan’s 13 Vietnam’s privately owned full-service Bamboo
Ryan Peters desire for grand flying Airways adds Embraer jets to its fleet
Chief Designer
Chan Ping Kwan
Printing
Printing Station(2008)
ADMINISTRATION
General Manager
Shirley Ho
6 AirAsia Group to cash in big from expected sale
E-mail: shirley@orientaviation.com
of 49% AirAsia India holding INDUSTRY ADDENDUM
7 Cathay Pacific Group adopts clean sheet 18 STELIA Aerospace unveils single aisle business
ADVERTISING approach to post COVID-19 structure class seat
7 Every penny counts
Asia-Pacific, Europe & Middle East
Defne Alpay
Tel: +44 7712 829859 NEWS BACKGROUNDERS
E-mail: defne@orientaviation.com 8 Indian aviation falling short in nurturing local
leadership talent
The Americas / Canada
10 Distributing COVID-19 vaccine air cargo’s
Barnes Media Associates
“greatest challenge” says IATA
Ray Barnes
Tel: +1 434 770 4108
Fax: +1 434 927 5101
E-mail: barnesrv@gmail.com
ray@orientaviation.com 18 AMECO to be China’s first Pratt & Whitney
EngineWise GTF engine MRO provider
18 India’s Air Works wins Marketing Campaign of
Download our 2020 media planner at: 2020 at MRO Asia-Pacific
orientaviation.com/advertising
18 Jennifer Cato announced as Travelport’s new
Follow us on Twitter @orientaviation 11 SIA pilots offer deeper salary cuts to save jobs of chief marketing officer and a member of the
cockpit colleagues company’s Senior Leadership Team
OCTOBER 2020 / ORIENT AVIATION / 3
COMMENT
We hear you on emissions, industry says
Aviation’s contribution to global warming has long been warned last month, ultimately the climate crisis will “dwarf”
subject to controversy with airlines a primary target of the impact of the pandemic. There may be a horrendous
environmentalists. This situation has persisted despite number of coronavirus fatalities, frustrating lockdowns
the fact aviation is the only global industry with ambitious and international border closures, but people increasingly
targets for reducing emissions and achieving long-term are worried about the effects of global warming even in
sustainability. pandemic times.
COVID-19’s ruinous financial impact on airline A Globescan poll recently conducted across 27 countries
operations, bringing international flying in particular to a showed 90% of people regarded climate change as a very
virtual standstill, presents a good reason for carriers to put serious or somewhat serious problem and that these beliefs
their environmental obligations aside as they struggle to had strengthened in the last few years.
survive. But this has not happened. There is absolutely no doubt there is an increase in
The Air Transport Action Group’s (ATAG) 2020 Global extreme weather events and temperature changes on every
Sustainable Aviation Forum - Green Recovery, an online continent in the world. This situation alone is sufficient reason
conference held at the turn of the month, was proof of for airlines and the industry in general to maintain their focus
aviation’s commitment to emissions reductions. The summit on working to reduce the impact of emissions from aviation.
brought together leaders from all sectors of aviation. They Scores of thousands of jobs are disappearing at
discussed critical environmental issues related to the airlines and across the spectrum of their suppliers, but
sustainability of the industry and its green recovery post the when the pandemic passes and growth returns to some
pandemic. form of predictability, whether that will be in 2024, as the
Airlines, aircraft and engine manufacturers, airports International Air Transport Association is forecasting, or
and suppliers are recommitting to their sustainability goals beyond, the challenge of mitigating climate damage from
despite the immense pressure of surviving the COVID-19 aviation will not have gone away. In fact, it will have become
crisis. more important as aviation’s target of a 50% reduction in
Present times may be bad, but as Britain’s Prince Charles emissions, against 2005 levels, draws ever closer. ■
TOM BALLANTYNE
Associate editor and chief correspondent
Orient Aviation Media Group
A trusted source of Asia-Pacific commercial aviation news and analysis
ORIENT AVIATION ORIENT AVIATION CHINA
OCTOBER 2020 / ORIENT AVIATION / 5
ADDENDUM AIRLINES AIRPORTS PEOPLE
Starlux Airlines tapping Taiwan’s desire for grand flying
By Tomasz Sniedziewski in Taiwan conditions, Starlux remains billion. Its target is NT$30 billion,
positive about its outlook. In said airline spokesman, Nieh Kuo-
When Starlux Airlines, Taiwan’s Taipei to Penang, Malaysia and Da September it announced the wei, who declined to offer more
newest carrier, launched flights on Nang were put on indefinite hold leasing of eight A330-900neo, details about the airline’s strategy.
January 23 this year and thereby in March. making it the first Taiwanese The massage of the message is
establishing a third force in the By last month, the carrier’s carrier to fly the type. Deliveries Starlux’s funding is solid.
skies of Taiwan, its first challenge website said routes to Penang and will start from the fourth quarter of Unlike its rivals in Taiwan,
was battling the hardship of the Macau were being operated but next year. Starlux has not entered the
COVID-19 pandemic and not, Taipei-Cebu was canceled until the Starlux’s order book is now 10 domestic or cargo sectors. It is
as expected, wooing skeptical end of March 2021. A350-900s, nine A350-1000s and using the hiatus created by the
customers. In the first half of 2020, Starlux a commitment to three additional pandemic to reinforce its brand,
Of the three initial Starlux lost NT$1.31 billion (US$44.8 A321neos over its previous order which has established very strong
destinations out of Taipei, the million), only NT$1 million or of 10 of the type. Following the recognition in Taiwan.
carrier had to suspend its service US$35,000 less than China recent signings, Starlux will have When the airline decided
to the Special Administrative Airlines. To June 30, the full- 39 aircraft by 2024. to participate in pseudo trips
Region of Macau less than two service carrier had accumulated Starlux said the A350 will join abroad – flights to nowhere – one
weeks after the inaugural cross losses of NT$2.81 billion. its fleet at the beginning of 2022, flight sold out in just 30 seconds,
straits flight. In quick succession, Despite the adverse market which will be slightly later than according to media reports.
originally planned, and that the Top of the class positioning
planes will be equipped with first convinced Samsung to partner
class, a decision going against the with Starlux in the launch of its
trend at many Asia-Pacific carriers. latest flagship smart phone in
Longer term, it has the U.S. in its Taiwan.
sights for its long-haul fleet. “Why shouldn’t we be able to
The increase in scale of its hold out?” asked Starlux Airlines
operations will put Starlux on par chairman, Chang Kuo-wei,
with funds hungry China Airlines in a profile in the widely read
and EVA Air. From early 2021, CommonWealth magazine. The
Starlux will continue with building positive buzz around the brand
on its current capital of NT$8.36 seems to fuel his optimism. ■
AirAsia Group to score big from AirAsia India exit
By Anjuli Bhargava Malaysian LCC group invested Tata was sold on the idea. management style of the Malaysia
$14 million-$15 million to launch Citing another AirAsia joint headquartered LCC group.
AirAsia Group co-founder, Tony the carrier, along with partner, success, he painted a picture of “The blame for the venture
Fernandes, is jockeying bids Tata, seven years ago. instant prosperity when seeking going awry lies far more with
between joint venture AirAsia At press time, it was reported board approval for the deal. Fernandes and Co who tried
India (AAI) majority partner, the Tata had first right of refusal Until the news broke that and failed to micro-manage
Tata Group, and fund investors to decline to buy the AAB Fernandes had an offer of $54 the company from Malaysia,” a
as he negotiates the sale of his shareholding in the LCC. If it million from the offshore fund, source told this reporter.
company’s share of the LCC, declines, the foreign fund will be he was expected to sell his He added Tata was “left
India’s Business Standard has the LCC’s replacement investor, holding in AAI to Tata, which took holding the can” and was in the
reported. the Business Standard said. management control of the group unenviable position “of putting an
Malaysia’s AirAsia Berhad In 2012-2013, master in November last year. unruly house in order”. Whether
(AAB) owns 49% of AAI and it salesman Tony Fernandes sold a Tata sources have assessed these are Tata’s tactics to lower
has been written the company billion dollar dream to Tata Group the current valuation of the 49% the final price to be paid for the
has been offered US$54 million chairman, Ratan Tata. Setting up Fernandes holds in the LCC at exit of Fernandes is anybody’s
by a private fund for acquisition a joint venture LCC in India, he beyond US$50 million. guess, but more than one source
of its minority holding. The offer told the leader of India’s most In India’s difficult political has told Orient Aviation this
includes the potential suitor’s enduring conglomerate, would and economic environment, marriage is headed for divorce,
willingness to take on short-term bring both of them new riches Fernandes has attracted some a situation made clear by the
expensive loans from banks and with its asset light model in such a antipathy in regulatory and latest offer for AAB’s holding in
Tata Capital. It is believed the huge, potentially, airline market. industry circles because of the Bangalore-headquartered AAI. ■
6 / ORIENT AVIATION / OCTOBER 2020
Cathay Pacific Group adopts clean sheet strategy for shaping new structure
At press time, with pilot union an interim loss of HK$9.9 billion was announced, Tang told media
leaders metaphorically banging (US$1.28 billion), the biggest in its the airline group had approached
on senior management’s door history and a result of COVID-19, the government for assistance.
demanding a place at the airline Cathay Pacific Group chairman, The prestigious airline
group’s restructuring table, Patrick Healy, said. company is not alone among
the lead Hong Kong airline The airline group had top tier carriers in the region
group continued it’s softly, undertaken an earlier three- being forced to make redundant
softly campaign of managing year transformation, advised thousands of employees due to
the public’s expectations of by the McKinsey management the capacity rout brought on by
inevitable job losses from the present the future size and shape consultancy. It reduced the the pandemic.
Hong Kong icon’s root and branch of the company to the board in airline’s home city headcount by In September Singapore
restructuring. the current quarter,” Hazelton 600 and preceded lay-offs at its Airlines Group CEO, Goh Choon
In an early October note wrote to HKAOA members in a outports. Phong, announced 4,300 jobs
to members of the Hong Kong memo circulated widely at the The Cathay group employs had to go at the flag carrier. He
Aircrew Officers Association, airline group. more than 20,000 staff worldwide. said 1,900 jobs had disappeared
chairman Tad Hazelton said In the meantime, the group’s Passengers of the company’s through natural attrition, vacant
Cathay Pacific’s director of CEO, Augustus Tang, told Hong airlines are running at about a jobs not filled and voluntary
flight operations had told him Kong’s South China Morning 1,000 a day. Earlier this year, the retirements. These staff reductions
there was no firm date for Post that smaller aircraft could group was a recipient, along with were not enough to avoid the
any announcement about the be in play in its future fleet and most major companies in Hong elimination of another 2,400
restructuring of the company that a review of the size of its Kong, of government backed positions at the group, he said.
“as details were continually business class offering was part of salary support and a package of (See page 10. SIA pilots offer
changing”. restructuring discussions. loans that it must be repaid in five deeper salary cuts to save
“Management still aims to In August the group reported years. At the time the relief deal cockpit jobs) ■
Every penny counts
Some clever clogs at Qantas did were offered for sale online. Fully
their bit for the environment and kitted out with F&B and offering
the coffers of the group when the options of amenity kits,
they came up with the idea of Qantas biz class PJs and a throw
selling off the galley carts of produced exclusively for Qantas,
the airline’s nostalgia laden 747 half bar carts were advertised at
fleet. With the news the beloved $691 or 169,000 Qantas Points
aircraft of millions of passengers and full size carts were $1045.
was destined for six feet under Overwhelmed by the response,
in the airline cemeteries of the all the carts sold in two hours.
world or be broken up for parts, Airlines across the region
1,000 of the fleet’s galley carts experiencing similar difficulties in
making money as the Australian
headquartered airline are proving piloting an A380, a 777-300ER, of experiences that includes
to be just as innovative when it B747-400 or B737-400 in the Restaurant A380 @Changi, a
comes to earning cash. Several comfort of a simulator suite. dining experience with SIA’s
airlines are operating “flights Prices start at $381 for two award winning service inside
to nowhere” to keep some of people for a 30-minute session. an SIA A380. In November, an
their pilots busy and to earn The Bangkok-based carrier also exclusive behind-the-scenes
money, while an enterprising has opened a restaurant at its tour of SIA training facilities will
few are putting some of their headquarters in the city where be on offer, where children can
on-ground assets to financial use. diners can eat in a space that dress up and role play as cabin
Thai Airways (THAI) is offering replicates an airplane cabin. attendants. Adults can choose
a “THAI Simulator Experience” Singapore Airlines also to operate a full flight simulator,
for customers to “fly” an aircraft is thinking outside the box. sample some of the carrier’s
in their flight simulators, which It has launched the Discover premium in-flight wine labels and
includes the experience of Your Singapore Airlines suite attend a grooming workshop. ■
OCTOBER 2020 / ORIENT AVIATION / 7
NEWS BACKGROUNDER
Indian aviation falls
its start-up days in 2013-2014.
Lumba even made a trip to
Kuala Lumpur, but declined an
short in nurturing local
offer from the Malaysian LCC.
More recently, despite being
past retirement age, IndiGo has
leadership talent
brought him back to head its
ATR and UDAN operations, an
appointment jeopardised by
India’s Ministry of Civil Aviation’s
(MOCA interference. Lumba had
Tiny CEO cabal ride merry-go-round at the top of India’s airlines. a long career at Indian Airlines
then set up flight operations for
IndiGo and was a member of the
By Anjuli Bhargava LCC’s start-up team.
More recently, when Jet
Airways pulled downed its
shutters in 2019, the airline’s
CEO, Vinay Dube, was
approached by at least two
airlines - SpiceJet and GoAir - to
run the carriers. Dube, new
to India, had built a name for
himself in his short stint with
Jet. Many of his colleagues
I
acknowledged his thorough
ndia’s aviation sector has than moving to it. churn within IndiGo began to understanding of the airline
been plagued with an acute Therefore, it was not a take its toll on staff, the airline’s business. However, unable to
management talent shortage surprise to IndiGo insiders and then chief commercial officer, move cities for personal reasons,
from the word go and it is the industry in general that Sanjay Kumar, who had more Dube chose GoAir over SpiceJet
showing no signs improving. Bhatia sought to convince Rono than a decade with the airline, despite the former’s not so
In early 2018, when the Datta, an Indian by birth, to decided to move on. He too happy reputation in handling
founder of LCC IndiGo, Rahul come on board at the LCC. had three airlines chasing him. employees. Dube left GoAir in
Bhatia, was scouting for a CEO Datta has had vast management GoAir approached Kumar to August.
to succeed Aditya Ghosh, then experience at airlines in the join it as did SpiceJet, where he While the above instances
president and CEO of India’s U.S. and has a reputation had worked earlier in his career. highlight the acute shortage of
largest airline by numbers, he for rescuing carriers from AirAsia India, a joint venture talent the sector faces at top
was not exactly overwhelmed bankruptcy. between Tata Group and the management level, the sector
with candidates. In India, no Datta’s children were AirAsia Group, was Kumar’s also has suffered and continues
matter the airline looked at, the grown and India was a known choice, no doubt influenced by to suffer from an acute lack
CEO either had been imported animal to him. He had spent Tata’s controlling interest in the of management talent, or as
- Vistara, AirAsia India, GoAir four years at Sahara Airlines, LCC. some industry professionals
and Jet Airways being cases in from 2004-2008, before it was He came on board at AirAsia say a “love and obsession
point - or was run directly by sold to Jet Airways. He had the India as chief operating officer for all things foreign”. While
their promoters/investors. The required expertise even if he was in November 2018 at almost the technical expertise – pilots,
obvious example of the latter is seen more as a full service airline same time the airline named engineers and technicians – is in
SpiceJet. man than one with expertise Sunil Bhaskaran as CEO. Kumar, plentiful supply in India, it is the
So convincing a qualified in low-fare carriers. Only a few who had better knowledge of management cadre where many
potential CEO to relocate may know Datta also had been the sector than his boss, did not feel there is a vacuum.
to India’s capital city, Delhi, a choice for Bhatia in 2004. last long for a variety of reasons A former aviation secretary
labelled as one of most polluted When Datta visited India in and returned to IndiGo as chief has said India could do with “one
cities in the world, was not 2003, founders of three of the of strategy and revenue. less airline and one more airline
easy. Increasing numbers of country’s airlines, Naresh Goyal, Shakti Lumba, now 71, and management school” to help the
expatriates were looking to leave Subroto Roy and Rahul Bhatia, an industry veteran respected sector develop and prevent the
the city, concerned about the approached him to join them. for flight operations and endless cycle of airlines going
impact of air pollution on the He chose Air Sahara. management expertise, had bankrupt in India. Although
health of their children, rather In late 2018, when the been targeted by AirAsia India in people tend to think only of
8 / ORIENT AVIATION / OCTOBER 2020
Kingfisher Airlines and now Jet leaders have developed at CEOs – the latest in a long line in the U.S., was a former CEO
Airways [as failed], the country’s IndiGo. But it suffers too because was Cornelis Vreeswijk. In 2019, and chairman of US Airways.
aviation history, he pointed out, most of the newbies use the after Jet Airways was grounded, This arrangement has led to
is populated with failures almost airline to poach staff for their Vinay Dube moved to the top considerable discontent within
from the word go. own teams. job at GoAir, but its owner, Jeh the airline and among its Indian
Wadia, has replaced him with employees who often feel they
THE PUBLIC A LOVE OF ALL Kaushik Khona. The airline is have to report to “retired expats
SECTOR LEGACY THINGS FOREIGN struggling to retain key staff and way past their shelf lives and
One of the reasons the industry Not everyone agrees local airline has had more than 13 human who have little understanding of
has been short of talent is talent is in short supply. They resource directors in as many the Indian situation and reality”.
India’s aviation sector has been argue instead that Indian airline years. Many senior employees have
vested entirely in the public founders have been obsessed “The inability of the airline’s taken exception to the fact that
sector. Chairman and managing by the white man, a legacy promoters to work consistently as the airline grew more expats
directors (CMD) of Air India and of India’s colonial past. “The with senior professionals has were brought in to supposedly
Indian Airlines typically have assumption is someone who been seen time and again”, said manage affairs but in fact they
been government officials and comes from overseas with some a former CEO of the carrier. ended up making a “hash”
have tenure at best of five years global experience necessarily Most aviation industry personnel of things. The subsequent
at their appointed airlines. knows better”, said a senior who have worked at GoAir have departure of many of the expats
“Before the person heading captain with IndiGo, who also said its owners do not trust their confirms their opinions. But even
the airline could acquire expertise has worked for Jet and Sahara. own teams. GoAir is seen as a as the industry grapples with its
in running it, the incumbent Jet Airways founder, Naresh stop gap arrangement by many biggest crisis in COVID-19 the
would change,” said a former Goyal, largely left the reins aviation personnel, especially lack of talent in aviation in India
CMD, who grappled with this of power in foreign hands, those who cannot leave Mumbai remains a worry for the industry.
and attempted to convince the primarily Nikos Kardassis and due to personal reasons. It is a “chicken and egg”
authorities to extend tenures. Wolfgang Prock-Schaeur, who But even at airlines like predicament. Talent at the top
This, in his view, is one of the both had long stints as CEOs. IndiGo, the start-up’s CEO is missing because promoters
reasons for the inconsistent Goyal turned to Kardassis in was Bruce Ashby, brought in don’t want to hand over control
performance of government- all crises, most recently pulling by Rakesh Gangwal. Several to fellow Indians. But unless
owned airlines. Even when him in when Tata Group was senior appointees have been the Indians find themselves
talented, not everyone is willing in discussions to buy Jet, a deal selected by Gangwal, albeit in positions of authority or
to leave a “safe, public sector, that failed to happen. from a distance. Gangwal, leadership, they cannot develop.
government paid job” with No matter the airline in who owns approximately 37% It remains to be seen who will
several perks to join private India, its owners and investors of IndiGo but lives in Miami blink first. ■
carriers that are perceived as far have hired foreigners to run
rockier boats and subject to the them throughout India’s aviation
whims of their founders. history. India’s first LCC, Air Rollover of aircraft leases grinding
As late as 1994, the Deccan, brought in Warwick to halt in paralysed market
government allowed private Brady to run its operations in
airlines to operate as scheduled Bengaluru. Similarly, when Global aviation analyst and data provider, IBA, has warned the
commercial aircraft leasing market will experience considerable
airlines. In 1993, Damania Vijay Mallya decided to take the
turmoil in 2021 with more than 1,000 aircraft forecast to be
Airways started operations as plunge with Kingfisher Airlines,
returned to lessors. In a recent webinar, IBA said approximately
an air taxi business. But many he appointed Alex Wilcox, a 1,300 aircraft, including 200 wide-bodies, were scheduled
of the early players operated as low-fare airline expert, to launch pre-pandemic to be returned to their lessors. Most of them
“one man shows” with very little the airline. Wilcox left Kingfisher expected to then extend their leases. In the era of the coronavirus
organisational structure. It was within weeks when he realised that outcome is extremely unlikely as increasing numbers of airlines
only when Jet Airways was set Mallya was not interested in are in negotiations to terminate longer leases earlier rather than
up in the mid-1990s that some setting up a low-fare product. At lease planes.
talent began to develop in the that stage, Mallya hired Sanjay “This uncertainty is set to break the model of recent years of
sector outside of Air India and Agarwal, who had done a stint seamless redeliveries between lessees. IBA expected a higher level
of disputes between airlines and lessors around lease returns and
Indian Airlines. with US Airways and had been
redeliveries,” it said.
The three airlines have CEO of SpiceJet until the Marans
IBA said the decline in aircraft leasing activity would drive a
provided the industry with bought the company. Eventually, corresponding fall in engine shop visits. Pre-COVID-19, MRO shop
many of its skilled veterans. But Mallya was forced to take business was forecast to increase from 3,200 in 2019 to 4,500 by
whenever Indian investors have matters into his own hands. He 2023, aviation intelligence platform, IBA.iQ said. Now they will
started airlines, they have looked ran the ship aground himself. reach only 1,000 shop visits this year. It will take until 2026 to
outside the country for talent. Mumbai-headquartered achieve previously forecast 2019 levels.
More recently, some talented GoAir has only had expat
OCTOBER 2020 / ORIENT AVIATION / 9
NEWS BACKGROUNDER
Distributing a COVID-19
vaccine air cargo industry’s
greatest challenge
Dealing with a pandemic is bad enough. Now airlines have been told in no uncertain
terms they will face a huge challenge in distributing the COVID-19 vaccine after it is
developed. Associate editor and chief correspondent, Tom Ballantyne, reports.
T
he International Air
Transport Association’s
global head of cargo,
Glyn Hughes, does not
mince words when
he is describing the importance
the airline industry must place on
preparing for the distribution of
a COVID-19 vaccine to 7.8 billion
people worldwide.
Just when that will be
remains a matter of conjecture, “We know the procedures match shipping needs with the “However, with over 3,500
but if scientists soon produce a well. We need to scale them up infrastructure capabilities of cargo differently sized cargo handling
coronavirus vaccine, transporting to the magnitude that will be for pharmaceuticals and also facilities worldwide, until now the
it to where it’s needed will be required.” IATA is working with certifications of service providers industry has lacked visibility about
one of the greatest challenges air airlines, airports, global health in the value chain. the capacities and services these
freight has faced. bodies and pharmaceutical “This is particularly timely facilities offer,” he said. “The
The capabilities of the aircraft firms to pull together plans for a amid the COVID-19 crisis when need for greater transparency is
itself are not the only problem. distribution program, calling it the shippers of medical supplies and even more critical in the current
“The vaccine will have to be industry’s “largest single transport pharmaceuticals need accurate context.”
stored at correct temperatures challenge ever”, he said. information for time-and Even with military precision
as it moves from the production There are as many as 250 temperature sensitive shipments,” planning, Hughes said flights to
source to the airport and then different vaccine programs under explained the airline body. “ONE Africa, Latin America and parts
from the aircraft to distribution development, said Hughes, citing Source lists the latest operational of Southeast Asia, which lack
centres and onto medical facilities the World Health Organization. information about airlines, vaccine production capabilities,
delivering the inoculations,” Governments have invested airports, cargo handling facilities, will be especially challenging.
Hughes said. billions of dollars to develop a freight forwarders, ground Developing markets rely
vaccine at an accelerated pace handlers, shippers, and trucking almost wholly on cargo carried
and eleven possibilities are companies. All critical information in the bellies of passenger
understood to be in late-stage contained on ONE Source has planes, many of which remain
trials. But while U.S. President been verified by IATA for accuracy. grounded from the COVID-19
Donald Trump has been touting IATA ONE Source is free for all plague. For example, Hughes said,
the arrival of a vaccine as early as service providers across the air distributing a vaccine in Africa
this month or by November, most cargo supply chain,” IATA said. would be “impossible” now,
experts suggested a more realistic Hughes said air cargo has given a lack of capacity combined
estimate was mid-2021. been essential in the global fight with the size of the region, its thin
IATA has launched ONE against COVID-19, transporting surface transport infrastructure
Source, an online platform vital equipment and medicines and the complexities of border
to help the air cargo industry to those who need them most. crossings. ■
10 / ORIENT AVIATION / OCTOBER 2020NEWS BACKGROUNDER
Singapore Airlines a new generation of pilots will
have their careers put on hold.
SIA has had let go about half of
pilots offer deeper its 400 cadet pilots and cabin
crew trainees. A spokesman
salary cuts to save
said those who remain will be
supported through their training
programmes, but the airline
cockpit jobs could not keep them after that
due to the “current surplus in
staff numbers”. SIA will be open
to hiring them should there be
Anyone familiar with Singapore Airlines demand for cabin crew or junior
(SIA) group CEO, Goh Choon Phong, knows reduction measures.” pilots when air travel returns to
cutting 4,300 jobs from the group’s payroll The airline is eliminating pre-Covid levels, the airline said.
around 4,300 positions across For Goh, all of this has been
was the most difficult task of his career. But SIA, its subsidiaries SilkAir and an emotional experience. “For
the catastrophic impact of COVID-19 left him Scoot and outports. Some job our impacted colleagues, please
with no choice, reports associate editor and reduction targets have been met know this is not a reflection of
by not filling vacancies, offering a your individual strengths and
chief correspondent, Tom Ballantyne.
generous Special Early Retirement capabilities. It is the result of an
Scheme (SERS) for ground staff unprecedented travel paralysis
and pilots and a Voluntary brought about by a global
A
Release Scheme (VRS) for cabin pandemic. Please also be assured
fter the latest tries to avoid mass sackings. So its crew. But another 2,400 jobs we will conduct the process in a
round of Singapore announcement last month that have to go. fair and respectful manner and do
Airline Group retrenchments were unavoidable In May, the SIA Group our best to ensure you receive all
retrenchments because of COVID-19 made clear reported a net loss of US$155.8 necessary support during this very
were announced in the challenges the airline group million for the 12 months to trying time,” he told employees in
mid-September, the airline group’s faced. March 31, a reversal from a $502 his message
pilots agreed to take deeper cuts In a message sent to million profit a year earlier. In July, Nobody could have predicted
in their salaries so more of their more than 17,000 staff in it announced it had lost $538 the devastating impact of
cockpit colleagues could remain mid-September, CEO Goh Choon million in January to March, down COVID-19, he said. “Eight months
employed, Singapore’s Straits Phong painted a grim picture of from the $149.2 million net profit on, the number of carriers
Times has reported. the group’s situation. There had it reported in the same months that have collapsed continues
In addition to a cut in their been a “catastrophic” 99.5% a year ago. It was the largest to rise. It is not clear who will
Monthly Variable component decline in passenger carriage quarterly loss in the history of the ultimately survive this crisis. From
benefit, re-employed captains in the first quarter of fiscal year company. airlines and airports to aircraft
and first officers will have their 2020-2021, he said, and the SIA has done its best to manufacturers and suppliers,
salaries reduced by 60% and group was operating only 8% soften the blow for departing everyone has taken sweeping
50%, respectively, at SIA and of its capacity compared with employees. Retrenched staff will steps to cut costs – including
SilkAir. The new pay rates apply pre-COVID-19 times. continue to receive their salaries drastic measures to reduce staff
from October 1 to March 31 “Relative to most other until December 15 and will retain numbers - and prepare for an
next year. The group employed major airlines in the world, the their medical coverage and other uncertain future,” he said.
approximately 2,600 pilots before SIA Group is in an even more benefits until the same date. “The future remains
the pandemic took hold, the vulnerable position,” Goh said. Each affected employee will extremely challenging. The
newspaper said. “We do not have a domestic be paid in lieu of the notice period pandemic is not under control,
“The company will market which, as demonstrated in their employment contract, with some countries experiencing
implement additional pay cuts for in many countries, is the first to which can be up to three months second and third waves. We
all remaining pilots at Singapore recover in air traffic. of salary. Those who have been do not have a vaccine and tight
Airlines and SilkAir with effect “Given the expectation the in service for two years or more border restrictions remain in
from October 1. As a result, this road to recovery will be long will receive one month of pay for place as governments try to limit
agreement will help mitigate and fraught with uncertainty every year of service, capped at imported cases. Global economic
future job losses for our pilots,” it has come to the point where 25 months. growth remains anaemic, with
an airline group spokesman said. we have had to make the Sadly, in an industry that little impetus for the return of
Unlike many airlines in times painfully difficult decision of not long ago was fretting about international leisure and business
of crisis, Singapore Airlines (SIA) implementing involuntary staff potential cockpit crew shortages, travel.” ■
OCTOBER 2020 / ORIENT AVIATION / 11NEWS BACKGROUNDER
Southeast Asia’s emerging
powerhouses
China and India have long been touted as the growth engines of Asian aviation but
two other nations promise to be future powerhouses of the airline industry. After the
pandemic, Vietnam will almost certainly be one of the region’s winner.
By associate editor and chief correspondent, Tom Ballantyne
I
t is no accident Vietnam’s another wave of the virus, in July dominate the market. Flag carrier, a cap of 34% ownership of
airline sector is leading the and August, saw services fall Vietnam Airlines (VNA), and low- a domestic airline. Southeast
way in recovery from the by around 30%. Nevertheless, cost carrier, VietJet Air, command Asia’s largest budget carrier, the
coronavirus pandemic. The General Director of Vietnam a combined 75% market share. AirAsia Group, has made four
country’s government acted Airlines, Duong Tri Thanh, has Pacific Airways (formerly Jetstar unsuccessful attempts to add the
swiftly when the outbreak began said domestic flights in the last Pacific), a wholly-owned VNA nation to its network. Vietnam
and despite a recent increase in five months of the year would be subsidiary after Qantas Airways remains the only country in the
cases the situation appears to be around 70% of last year, much recently offloaded its 30% region that does not have foreign-
under control. higher numbers than most other holding, has another 10%. owned budget airlines operating
The result? A study released countries in the region. Newcomer Bamboo Airlines is in its home market.
last month by Oxford Economics What the figures indicate, the fourth major airline in the Last month, Vietnam Airlines
forecasts Vietnam is expected according to analysts, is when county and VASCO, another VNA and Vietjet resumed international
to be the only Southeast Asian restrictions on international travel subsidiary, plays a minor role. flying post the pandemic hiatus
economy to report expansion this ease, the Vietnamese aviation Vietnam’s Hanoi-Ho Chi with flights from South Korea.
year, with its GDP to rise by 2.3%. sector will be well positioned Minh City is the world’s fourth Vietjet, which is marketing itself
The Global Economic Outlook to attract growing numbers of busiest domestic pair in seats as a new age carrier, sweetened
report said recovery prospects tourists and foreign investment. offered and the most lucrative its September 30 re-launch of
look brightest for Vietnam, which The Vietnamese in-country route in Southeast Seoul-Ho Chi Minh City (HCMC)
had contained the COVID-19 government’s approach to the Asia. Vietnamese air travel has and Seoul-Hanoi-HCMC from
outbreak very effectively until COVID-19 crisis has been steady grown nearly 20% annually for October 7 with a new deluxe
recently. Vietnam’s performance and measured. For example, the past five years. In response, ticket class and upgraded
stands in stark contrast to the rest Hanoi froze approval of entrant the Transport Ministry plans to benefits for members of its
of Southeast Asia, where growth airlines until 2022. Transport spend $15.4 billion to develop 23 Skyboss frequent flyer brand.
is predicted to contract by 4.2% Minister, Nguyen Van The, said airports by 2030. Members will be offered business
in 2020. supporting existing operators There are high barriers class style services, including
Vietnam’s domestic flight must take top priority. There are to entry into the Vietnam air priority check-in and boarding,
network had returned to 2019 five commercial airlines operating passenger market for foreign luggage packages and seat
levels in recent months until within Vietnam, but two players aviation companies; specifically selection.
12 / ORIENT AVIATION / OCTOBER 2020Vietnam Airlines beat VietJet lack of safety overnight and
in re-opening the Seoul-Vietnam Vietnam early responder to airline mismanagement that
route by a few days, but the
vibrant LCC, along with young
re-opening international flights has led to airline losses. It does
not, however, detract from
full service Bamboo Airways, Vietnam Airlines flew Seoul Incheon to Hanoi’s Noi Bai the potential for growth post-
is testing the mettle of the flag International airport with an A350-900 on September 25 after pandemic.
carrier both domestically and a six-month hiatus in operating international flights. Passengers Indonesia’s unique
were tested for the COVID-19 virus after they disembarked from
regionally. geography, with most of
the journey.
While there remains a great its major cities separated by
It was the first international commercial flight to Vietnam since
deal of uncertainty about the the outbreak of the corona virus early this year. mountain ranges and seas means
impact of the pandemic on Deputy director of the country’s Civil Aviation Administration transportation by land or sea
Asia-Pacific airlines, it is assumed of Vietnam, Vo Huy Cuong, said: “this is not only the first inter- can take days and this gives the
that recovery will come at some national flight to Vietnam after COVID-19, but also a ‘trial flight’ aviation sector a competitive
stage. And if past performance is to evaluate our operational capability to welcome international edge. While there are more than
anything to go by, Vietnam will visitors by way of our local industry. 60 scheduled and unscheduled
resume its spectacular growth in “This flight denotes a substantial recovery for Vietnamese airlines operating in Indonesia
the aviation sector. aviation that realises the government’s dual goal of fighting the the market is dominated by
pandemic and promoting economic development, embracing the
The International Air flag carrier, Garuda Indonesia,
“new normal” with more development opportunities.”
Transport Association’s (IATA) its domestic subsidiary Citilink
statistics show Vietnam is one and Indonesia’s largest airline,
of five global markets with the of Vietnamese will be affluent more than ten-fold, from 102 budget Lion Air. Other operators
largest increases in passengers compared with 5% in 2018, aeroplanes in 1990 to 1,030 in include Batik Air, a Lion subsidiary,
after China, U.S., India and another factor offering the 2017. Airline expansion has been Malindo Air and Thai Lion Air.
Indonesia. Its annual growth rate promise of more major growth in underpinned by the country’s Before the crisis domestic traffic
from 2011 to 2015 was 32.65%. the country. economic growth, the emergence was reporting double-digit
The total Vietnam aviation Like Vietnam, Indonesia has of LCCs and the expansion of the growth for five years.
industry, including international seen impressive growth in its country’s middle class. All in all, post the COVID-19
traffic, increased by 2.6 times aviation sector since the airline But unlike Vietnam, Indonesia recovery there is little reason to
in scale, from 23.7 million industry was deregulated in 2000. has not managed the pandemic doubt the miserable hiatus in
passengers in 2011 to 61.2 million Airline passengers have increased outbreak competently. As a air passenger services is merely
in 2017. from nine million in 1990 to result, its growth has stalled, a pause in both Vietnam and
By 2030, the Boston around 90 million in 2016 and the especially as it already has Indonesia before they resume
Consulting Group forecasts 16% country’s airline fleets have soared growing pains ranging from their rapid trajectories. ■
Bamboo Airways
accepts first two
Embraer E195 jets
V
ietnam’s first visitors to a 16 island archipelago
full-service private off the southern coast of
carrier, Bamboo Vietnam. vice chairman, Dang Tat Thang, conglomerate, FLC Group,
Airways, is to Bamboo Airways, which said the Embraer E195’s short began flying in January 2019
operate its newly is targeting the middle to high runway performance made it with the aim of achieving five
arrived E195 jets from Hanoi to end leisure market, initially will ideal for flights to Con Dao, star status for the carrier as it
tourist hot spot, the southern service Con Dao with two flights which falls short in runway built its network in Vietnam and
island of Con Dao, 1,400 a day from Hanoi and once daily maintenance and aircraft fuel internationally. Pre-COVID-19,
kilometres (760 nautical miles) from Vinh and Hai Phong. It will supply. it was operating 51 domestic
from the nation’s capital, Hanoi. be equipped with a business The Hanoi-headquartered and regional routes and
The jet service to the island class in its 118 seat configuration. company, owned by travel had transported five million
will provide a staging point for Bamboo Airways executive to property and mining passengers since its launch. ■
OCTOBER 2020 / ORIENT AVIATION / 13MAIN STORY
NO BACKING OFF
LOWER EMISSIONS
TARGETS PROMISES
INDUSTRY
Global aviation remains on track with its commitment
to achieving a 50% reduction in emissions
by 2050 from 2005 levels, reports associate editor
and chief correspondent, Tom Ballantyne.
W
ith aviation losses mounting by billions Also in September, manufacturer Airbus announced
of dollars a month from the coronavirus developments in its hydrogen powered jet. Rival Boeing is
pandemic, the industry could be forgiven continuing its research and the design of the B787
for losing sight of ambitious ecoDemonstrator in joint partnership with Etihad Airways.
environmental targets. Mid-pandemic, Engine manufacturers, whose development work is
survival is the name of the game as airlines slash capacity critical to achieving ultimate sustainability, are pursuing
and store thousands of jets in airline parking lots; a situation emissions mitigation programs. “The pandemic has actually
that probably delights an extremist wing of the climate brought the aviation industry forward by focusing attention
movement that has long targeted airlines as major global on sustainability and how we need to advance technologies
polluters. that help the aviation industry drive down CO2 emissions,”
Despite the enormity of the crisis the airline industry is
experiencing, it has recommitted to its ambitious emissions
reduction targets. “The bottom line is it’s still critically
important for the industry to continue to push for
sustainability and meet the 2050 targets set in stone in
2016,” said former CNN journalist and Head of
Communications Environment at the International Air
Transport Association (IATA), Andrew Stevens.
“There is no doubt this is going to be more difficult
given the financial situation of the airlines, but we have not
seen clear evidence airlines are pulling back on their
commitments. For example, I have not seen anything that
suggested, at this stage at least, that airlines will not honour
their commitments to the uptake of sustainable aviation
fuel.”
It is a view shared across the industry. Last month the
oneworld alliance, which represents 13 major airline groups,
including leading Asia-Pacific carriers Cathay Pacific Group,
Japan Airlines and the Qantas Group, re-confirmed its
commitment to net zero carbon emissions by 2050. It is the
first global airline alliance to unite behind a common target
to achieve carbon neutrality.
14 / ORIENT AVIATION / OCTOBER 2020Pratt & Whitney senior vice president, engineering, Geoff to address the global challenge of climate change and
Hunt, told Orient Aviation last month. establish ambitious targets to mitigate CO2 emissions from
As a result of the pandemic, the engine manufacturer air transport. The targets remain to achieve an average
has reduced its workforce, cut capital expenditure and improvement in fuel efficiency of 1.5% per year from 2009
prioritized investments, but Hunt said one program Pratt & to 2020, a cap on net aviation CO2 emissions from 2020
Whitney has kept front and centre is the Geared Turbofan™ (carbon neutral growth) and a 50% reduction in net aviation
engine (GTF™). “We believe the geared turbofan CO2 emissions by 2050 relative to 2005 levels.
architecture we pioneered has room to develop and deliver In March, Montreal-headquartered International Civil
improvements in fuel efficiency and lower emissions, Aviation Organization (ICAO) agreed the types of carbon
particularly NOx,” he said. offset units eligible for compliance with the world’s first
Rolls-Royce has announced the completion of tests on global sector climate mechanism, the Carbon Offsetting and
ground-breaking technology that will power the world’s Reduction Scheme for International Aviation (CORSIA).
fastest all-electric plane. “Rolls-Royce’s announcement
follows the unveiling of Airbus’s three zero-emission MORE THAN 80 COUNTRIES HAVE
commercial aircraft models. It is another indication COMMITTED TO THE INDUSTRY’S CARBON
aerospace companies are increasingly attempting to align OFFSETTING SCHEME
their businesses to a future market emphasising climate At press time, 82 countries had agreed to participate in the
consciousness, GlobalData Aerospace and Defense Associate first and voluntary phase of CORSIA. It is estimated about
Analyst, Harry Boneham, said. 80% of the growth in international aviation’s CO2 will be
Results of a poll conducted by Globescan, released in covered by the scheme from the end of this year.
September, identified growing numbers of people are “very These developments were debated at the Air Transport
concerned” about climate change, despite the pandemic and Action Group’s (ATAG) 2020 Global Sustainable Aviation
the subsequent economic impact of the virus. Across the 27 Forum - Green Recovery, a virtual, on-line event at the turn
countries surveyed, around 90% of respondents viewed of the month that brought together representatives from all
climate change as a very serious or somewhat serious sectors of the industry to discuss aviation sustainability
problem. That finding has strengthened in recent years. In beyond COVID-19.
the UK, long time climate change advocate, the Prince of ICAO council president, Salvatore Sciacchitano, told the
Wales, has warned the climate crisis will “dwarf” the impact ATAG virtual summit “health and safety, and the
of the pandemic. fundamental economic viability of operators must be
At the turn of the month, China joined the front line of assured”.
the anti-emissions flight with President Xi Jinping’s “But we also must recognise the opportunity this crisis
commitment for his nation to reach carbon neutrality by provides to build back commercial aviation greener,” he said.
2060. ATAG executive director, Michael Gill, said “2020 was
For more than a decade, aviation, with IATA as its lead supposed to be, alongside 2019, the baseline for the
spokesperson, has been at the forefront of seeking the science CORSIA programme”.
“An average of the two years was agreed to smooth any
potential downturn in traffic in either year, but a situation as
grave as the one we face was never contemplated. It is much
too early to determine the impact of COVID-19 will have on
the CORSIA baseline. We will continue to monitor how the
situation evolves over time. However, any modelling done
today will be out of date in a week,” he said.
“It is very clear 2020 is a completely abnormal situation.
In the meantime, we have an industry to rebuild and a world
to reconnect.”
While there is a major reduction in aviation’s
contribution to global emissions this year given the number
of aircraft on the ground, at some stage growth will resume.
IATA’s Stevens said: “For the return to normal growth we
are forecasting 2024, but the numbers just get worse and
worse.
“We have not updated that, but we will have a new
financial forecast for the industry around the AGM in
November. I can’t imagine they are going to be any better.
They could be worse.
“Given this has gone on a lot longer than anyone
thought, returning to normal may be pushed further and
OCTOBER 2020 / ORIENT AVIATION / 15MAIN STORY
further out. There is a school of thought the trajectory of aviation fuel to contribute to building a firm supply chain
growth in the airline industry post COVID-19 will not for the airline industry,” he said.
return [to past performance]. We will go back to growth Malaysia Airlines Berhad CEO, Captain Izham Ismail
rates but we won’t be at the same level of air traffic in said: “Congratulations to the oneworld alliance, Malaysia
numbers by 2050 that we expected before the crisis.” Airlines is proud to be in support of this amazing initiative
The pandemic has removed large numbers of bigger, less together with our fellow member airlines towards driving
fuel-efficient aircraft from airline fleets. “I guess you can say the long-term sustainability of the aviation industry. We
it’s a bit of a double-edged sword,” said Stevens. Airlines are seek to play a greater part in building a legacy for future
taking the big ones out of service but the other side of the generations and are enhancing our own airline’s
coin is fleet renewal will be more of a challenge, that is contribution to global sustainability efforts.”
getting more efficient planes to replace the older planes, he Interestingly, the oneworld targets are well ahead of
said. IATA’s goals. Several member airlines are actively
“I can’t see fleet renewal will continue at the pace it was prioritising a range of environmental sustainability
originally planned, at least not in the immediate few years. initiatives. IAG (the parent of member carriers British
Yes, the environmentalists will be pretty happy when they look Airways and Iberia) was the first airline group worldwide to
up at the sky now, but the bottom line is the world still needs commit to net zero carbon emissions by 2050. JAL and
air travel and connectivity. The COVID crisis will reveal what Qantas also have targeted net zero carbon emissions by
it means to the global economy when you do not have air 2050, while Finnair is aiming even higher, with the goal of
travel, when you do not have planes in the sky,” he said. carbon neutrality by 2045.
“They’ve decided they are going to go carbon neutral,
ONEWORLD ALLIANCE COMMITS TO NET zero emissions by 2050 that is more aggressive than IATA,
ZERO EMISSIONS BY 2050 which is fantastic,” Stevens said. “And to say this in the
Oneworld’s environmental goals underscore its carriers’ middle of the COVID crisis underlines a commitment and
sustainability focus. The alliance’s chairman and Qantas focus to doing this. 2050 is still a long way out but to have
Group CEO, Alan Joyce, said the commitment of oneworld that reinforcement at this time is very gratifying.”
members to reach net zero emissions by 2050, from 2005 In some quarters, however, there remain questions about
levels, “underlines the importance we, as an alliance, place the ability of aviation to reach the 2050 targets. In a July
on becoming a more sustainable industry. Despite the report, senior associate, transportation and infrastructure
challenges we are all facing from the COVID-19 pandemic, research at Sustainalytics, Helene Gaudin, said airlines are
we have not lost sight of the responsibility we have to reduce in dire need of cash to recover yet the industry is expected to
emissions in the long term. Today’s announcement reflects adapt and prepare itself for the more critical crisis of climate
the strength of that commitment.” change.
Japan Airlines (JAL) president, Yuji Akasaka, said his “Despite the slowdown of air travel, long-term prospects
airline fully recognises the industry will play a vital role in for mitigating the carbon footprint of the industry are not
promoting a sustainable future and proudly supports the clear. Carbon commitments supported by comprehensive
alliance in achieving net zero carbon emissions by the year programs are in place. Nonetheless, our research suggests
2050. “In recent years, the JAL Group has invested in the existing measures may not be sufficient to curve down
development of sustainable emissions and mitigate climate change,” she said.
The financial struggle of the industry and the required
state support for it is a rare opportunity for
governments to invest in cleaner solutions and
dictate environmental conditions such as taxing
fossil fuels and requiring the use of greener energy
sources. It would undoubtedly be fiercely contested
by airlines, already suffering under heavy tax
burdens, she forecast.
IATA is fighting proposed environmental taxes
in France, which it calculated would fail to
decarbonize the aviation sector but would eliminate
150,000 French aviation jobs. The Convention
Citoyenne pour le Climat (CCC) - a citizens’ body
created under President Macron – is proposing
measures to curb aviation emissions, including an
eco-tax on tickets issued in France, to raise $4.9 billion
annually. France already collects some of the highest
aviation taxes in Europe. IATA director general and
CEO, Alexander de Juniac, warned such unilateral
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