CAPA - Centre for Aviation looked closely at the industry in North Asia at its CAPA LCCs in North Asia Summit, which had more than ten hours of agenda content. Here's some insights and observations from delegates during the event at the Radisson Blu Cebu, in the heart of Cebu City.
Route development crucial for tourism in the Philippines
Philippine Department of Tourism Undersecretary Benito Bengzon Jr, speaking on behalf of Secretary Bernadette Romulo-Puyat, said the whole aviation industry in the Philippines is working together to pave the way for enhanced connectivity and a seamless experience for passengers. Mr Bengzon noted that route development is essential for the development of tourism for the Philippines, given its archipelago geography. The Philippines has seen arrivals growth of 10.2% p/a for the last three years. According to Mr Bengzon this is faster than international growth to the rest of Southeast Asia, which has averaged 6.3% for the period. The Philippines has a "build, build, build programme" when it comes to airport infrastructure, he added.
Philippine CAA believes country is 20 years behind in airport infrastructure
Civil Aviation Authority of the Philippines (CAA) Director General Captain Jim C Sydiongco said the Philippines is "20 years behind in airport infrastructure" and there is a need to enhance connectivity and mobility throughout the country. We are ushering in a "new Philippines" with "affordable airport service" and are entering a "new age" of airport infrastructure and service levels, he said.
Excess capacity is a concern in the Asia Pacific region as air transport risks becoming 'collateral damage' to global uncertainty
CAPA - Centre for Aviation chairman emeritus Peter Harbison said excess capacity is a concern in Asia Pacific. Mr Harbison noted that in a high growth market like Asia it is very difficult to know what the market is going to be like in three or four years. Regional carriers "need to be thinking ahead" he stated. Mr Harbison added that the industry outlook is "uncertain", stating: "All of us are part of the collateral damage that is being done to the global economy due to the outcome of uncertainty and instability". This is "gradually and incrementally" becoming a bigger and bigger issue for the airline industry.
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Air Black Box: Price the key driver of increasing aircraft seat densities
Air Black Box company founder Timothy O'Neil-Dunne said "price" is the key factor that is pushing the increasing seat densities onboard aircraft, and that there will be more pushback on this in markets like the US rather than in Asia. This is due to there being certain expectations already built into the market. Aviation in Asia is in the phase of the "emancipation of the traveller" Mr O'Neil-Dunne said, noting that the market is price sensitive, while US and European airline passengers are used to the standards that were previously offered by full service carriers and have different expectations.
Collins Aerospace: Airlines need to bring in expertise from other industries to harness their data
Collins Aerospace sales director APAC Stephen Robinson said more and more airlines are seeing a need to bring in IT staff from other industries, in order to "harness their data and understand" what the data benefits are. He said airlines are in a "moment of change" concerning the generation of information. Mr Robinson noted that given aircraft renewal timelines, some airlines are stuck with legacy aircraft that are not set up to produce large volumes of operational data, while their newer aircraft are generating very large volumes of information. According to Mr Robinson, airline in the situation have to consider whether to retrofit older aircraft with new digital technologies, which will allow them to pull more useful information from more of their fleet.
Kiwi.com: A lot of data in the airline industry is still 'static'
Kiwi.com head of airline partnerships Marco Van Ieperen said the company sees a lot of data that is "static" in the airline industry. He highlighted the example of airport connecting times, noting Kiwi.com has over 60 data points when calculating minimum connecting times, whereas the industry usually just has a single average time it defaults to.
SITA: Airline data is 'crude oil' that needs refinement to become useful
SITA vice president - North Asia, Australia, Pacific Islands & ASEAN Growth Markets Sanjeev Kumar said while airlines collect a lot of data, this is not being "harnessed to its full potential". Mr Kumar said he believes that if data is the "new oil", for airlines it is still "crude oil" and needs to be refined before it is useful. In addition, the available technology needs to be leveraged properly to produce benefits for passenger personalisation and revenue benefits.
LCCs have capability to 'not only survive but potentially thrive' in a downturn, but sector remains volatile
Cebu Pacific Air chief executive adviser Mike Szucs said LCCs have the capability to "not only survive but potentially thrive at the expense of others if there is a downturn". He noted there is "uncertainty out there" with the economic sector and the aviation sector has "certainly been volatile in line with any uncertainty out there in the world". He described Cebu Pacific as a "complex" LCC, with a mixed fleet and mixed operational models. Alongside its point to point short haul operations with narrowbody aircraft, the carrier also operates regional services with turboprops and long haul flights with high density widebody aircraft.
Peach Aviation will 'grab the opportunity' presented with the A321LR
Peach Aviation executive advisor Patrick Murphy said the carrier will "grab the opportunity" with the A321LR, which will arrive at Peach in 2021. Mr Murphy said the A321LR is a "good airplane", but the "jury is still out" on the A321XLR and the carrier is "not interested in operating low cost long haul". He said Peach is "growing nicely", with nearly six million passenger p/a in 2018. Tourism in Japan is a key government policy and there are still "massive growth opportunities". Mr Murphy noted the Japanese government is encouraging development particularly in regional areas, not just Tokyo. He added that he "want[s] to do with Peach in Asia" what Ryanair has achieved in Europe.
LOOK OUT... 
Exclusive executive interviews from Doha will be published on CAPA TV in the coming weeks, as well as full coverage of the agenda sessions.
Cebu Pacific Air: A321XLR will be a great addition and will put new markets on the agenda
Cebu Pacific Air chief executive adviser Mike Szucs said the A321XLR coming in 2024 will be a "great addition to the fleet". Mr Szucs said the addition of the aircraft to the carrier's fleet will "put new markets on the agenda", including India. He also stated the A321XLRs will not operate out of Manila Ninoy Aquino International Airport, but instead will be based in Davao and Cebu allowing direct international services.
Philippines AirAsia: CAB has encouraged airlines to fly outside of Manila
Philippines AirAsia head - government affairs and policy Desiree Bandal said the Civil Aeronautics Board (CAB) has encouraged airlines to fly not just to Manila but to other destinations in the Philippines. She said this encourages growth outside of Manila, which promotes regional development in the form of projects such as hotels. She highlighted Philippines Air Asia "believes in the point to point model", and we "now fly international destinations from many secondary destinations" and believes in launching more flights from secondary airports.
T'way Air: Competition is 'super intensified right now'
T'way Air senior vice president Hyung Yi Kim said competition in the Asia Pacific is becoming "super intensified right now" with restrictions in slot allocations and a large amount of capacity coming into the market.
Spring Airlines: Chinese LCC growth constrained by lack of key resources, primarily slots
Spring Airlines president Zhijie Wang reported LCC penetration is about 10% in the Chinese domestic market and about 14% of international capacity. Mr Wang said he does not think this is going to grow, due to a "lack of key resources", primarily slots. He explained that Chinese LCCs cannot secure the slots they to expand due to limited airport capacity and pressure from the 'Big Three' Chinese mainline carriers. He described the 'Big Three' and high speed rail as the biggest competitors to domestic LCCs. Mr Wang said there has been some air travel growth between major cities but "the price is low" due to rail competition. He also noted it is "very hard to change minds" concerning the public perception of LCCs and low cost travel in China.
Eastar Jet plans medium haul network expansion and 60 aircraft in fleet out to 2025
Eastar Jet chief executive officer and president Jong Gu Choi said the carrier plans to introduce new medium haul routes as it expands its fleet. Eastar Jet plans to grow its fleet from 23 aircraft in 2019 to 60 by 2025 and expand its route network to 48 destinations over the same period.
Cebgo: Philippines still has a long way to go in terms of air travel penetration
Cebgo president and CEO Alexander Lao said the number of air trips per capita in the Phillipines has risen from about 0.2 to 0.5 per person p/a. Airlines have been a beneficiary of strong domestic tourism growth, due to its nature as an archipelago according to Mr Lao. We still have a "long, long way to go" compared to other states such as Malaysia or Hong Kong he said. He described ASEAN open skies is a "relatively slow burn", and "small little steps have been taken" although the process is a very lengthy one. Mr Lao said he thinks "we are very far away" from ASEAN open skies, but noted that progress has been made.
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