Looking good for 2024

December 1st 2023

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When it comes to the serious supply chain problems facing airlines most of the focus has been on big ticket items such as aircraft and engine deliveries and spare parts for MRIO shops. Read More » Not so, Thai Airways International (THAI) CEO, Chai Eamsiri, told delegates attending the 67th Asia Pacific Airlines Association Assembly of Presidents last month. The problem is affecting everything, right down to water taps in aircraft toilets.

“They are electronic, automatically turning on water when hands are placed under the tap and if something goes wrong you can’t get spare parts. The old style manual tap was easier to maintain.” Another example is when the refrigerator, the chiller, in the aircraft galley, breaks down, he said. “We can’t get a spare and are having to load dry ice on the aircraft instead.”

It was a problem shared by all members of the Association of Asia Pacific Airlines Assembly of Presidents CEO panel. Having just reported a third quarter net profit of $44.6 million, which Eamsiri said was better than expected, THAI still faced a lot of challenges, particularly supply chain disruption.

Sustainability, the theme of the Assembly, also was a topic of the panel discussion. Cathay Pacific CEO, Ronald Lam, said passengers had higher expectations about sustainability than in the past. One focus for his airline is reducing single-use plastics. At THAI, Eamsiri said that from December crew uniforms will be made from fabric that is 70% recycled plastic and 30% Thai silk. About 80% of the items in the airline’s new amenity kits are biodegradable.

Air India CEO, Campbell Wilson, said the vast majority of its customers don’t really have sustainability as their highest priority. “Many of them are first time travellers or relatively infrequent travellers. What they want from us is actually the travel experience. Reliability. Punctuality. Reasonable service,” he said.

“Their expectations in respect of the service and product have dramatically improved so our challenge is not so much to satisfy their expectations on sustainability, important though it is, but to satisfy their expectations of the travel experience.”

“Not every country can afford the actions that, for example, Singapore has taken. It is wonderful Singapore is providing a beacon and an example for the rest of us to follow, but we need to keep that context of where we are in our stage of development.”

On a positive note, it appears none of the CEOs is seeing post-pandemic changes in traveller attitudes, in both the leisure and business sectors. “So far this year we have not seen any major structural change in travel behaviour when it comes to leisure and business,” said Cathay Pacific’s Lam. “There was a lot of talk during COVID that tele-conferencing, zoom technology, would result in people travelling less for business. So far, we are not seeing that. Talking to corporate clients I don’t see a fundamental shift in the way they travel.”

Philippine Airlines (PAL) CEO, Captain Stanley Ng, agreed. It is clear business people still wanted to have face to face contact with clients and were prepared to travel to do that, he said. He added PAL had emerged from Chapter 11 bankruptcy in late 2021 as a more efficient airline with a stronger balance sheet. “We were surprised at the pace of opening up and how passenger demand recovered so quickly. 2022 was the best year we have ever had. We used that financial success to invest in people and products.”

Lam reminded everyone Cathay Pacific was one of the hardest hit airlines during the pandemic. “We had the toughest restrictions for our passengers as well as our crew. The last three years, for most of the time, we had less than 5% of our passenger capacity operating. Against that background, although we started late, we started low, this year we have been catching up very fast.”

This year and going into next year the airline would be busy on a number of things, he said. “The first is to rebuild from the pandemic. We need to rebuild our capacity, our services, our morale. I am glad to say despite all the challenges we have been making good progress.” he said.

“We have built to 70% of our passenger capacity and 85% of our cargo capacity. The other parallel track we are doing is catching up on our investment. There’s a lot of catch up we need to do in terms of our fleet end product, our services because in Hong Kong, at end of next year, we are going to have a three-runway system.

“Lastly, Hong Kong is in a very unique position because we can connect China with the world. With international capacity building up quite slowly between China and the rest of the world Hong Kong will play a key role in connecting China with the world and in that part we have been building our flights into the Mainland and connecting people there via Hong Kong.”

Air India’s Wilson – the airline has ordered 470 new aircraft – disclosed the carrier will be receiving a new aircraft every six days for the next two years. Now the third largest air travel market in the world and growing at 8% annually, Wilson said “we have new aircraft. We are recruiting many, many new crew and staff, improving the training regime. There is more work to do and we are making good progress.”

Wilson said the vast majority of Air India customers want reliability and punctuality, and the challenge is to satisfy customers’ requirements. He expressed confidence in competing with other airlines and increasing traffic for Air India.