Post on 03-Jul-2015
description
Peter Harbison
*The menu
Global issues affecting aviation
The Asia Pacific LCC market
profile
LCCs in Japan
The impact of LCCs for Japan
*Global issues affecting
aviation
#1 Unprecedented global economic uncertainty (ie it
is not all bad – but could be…)
China is driving the region’s economy and
Europe/N America will be slow for at least two years
Possibly 3-4 years of substantial global slowdown;
air freight data point to at least several months of
reduced growth, even for Asia
*Global issues affecting
aviation
#2
Fuel prices will rise significantly by 2021, affecting
airline profiles. This will mean higher yields in the
interim (= slower growth), until more efficient aircraft
and alternative sources are available (currently much
more expensive)
Environmental pressures to accelerate new
fuels, but also to hinder airline growth globally
Industry competition will intensify, with large
casualties likely = changing airline scenery
Chinese airlines will become much more dominant
internationally
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The future hubs will be in Asia/Middle
East
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Lion Air – more than 350 Boeing MAX
and -900s
AirAsia/AirAsia X - up to 300 A320s
include neos
IndiGo – 225 Airbus neos and others
Cebu Pacific – 54 A320s, neos and A330s
Jetstar – 62 A320s (and several 787s)
Tiger – 61 A320s
More than 1,000 orders from LCCs alone
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*What makes an LCC?
Culture, attitude, innovation
Deregulation
Seating density
Aircraft utilisation(these 2 alone can reduce legacy costs by 40%)
Reduced distribution/marketing costs
Unbundled pricing
Pressure on external costs, eg
airport charges
ground handling
*LCCs make everything easier
Like user-friendly websites - legacy
airlines in Asia, nurtured on agency
relationships and high yielding
passengers, have been slow to deliver
Consequently, online ticket sales in Japan
have lagged most other countries
With over 100 million internet users and
the highest GDP per capita of any large
nation, the %age should be much higher
LCCs will change all that…..
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*Peach vs ANA #1
Peach price - KIX-CTS rtn – JPY12,000
Time taken 4 minutes
ANA price – Osaka ITM-CTS rtn - JPY80,000
Time taken 20 minutes…..
Any difference in product?
Small difference in ownership?
*Peach vs ANA #2
Peach price - KIX-HKG rtn – USD406
ANA price – Osaka ITM-HKG rtn – USD850
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*The LCC impact in Japan
Much, much bigger than anyone expects!!
Airlines, Trains, Toll roads - competition
Regional centres - tourism
Regional councils - airports
*The LCC impact in Japan
New entry, prices and frequency will:
drive changes in travel behaviour
more services to regional airports
more frequent short trips
new travellers
force legacy airlines to restructure
undermine balance of pricing between
airlines, shinkansen and toll roads
Help move away from Tokyo-focus
Low cost airline thinking will
produce innovations across all sectors
*The LCC impact in Japan
There are around 95 airports in Japan
Most are loss-making
With new entrant airlines and
deregulation, their owners have the chance
to attract airlines to serve their airport
This also offers the possibility to stimulate
regional economic growth – at a time when
the regions desperately need it
a great new opportunity for the hospitality
industry!
“LCCs in
North Asia”
Macau, 4,5,6 September
Venetian Hotel
Peter Harbison
Change
is
in
the
air…