Wirraway
17th Jun 2004, 03:28
Thurs "Australian Financial Review"
Battle warms up for Asia and Pacific crowded skies
Jun 17
Ben Sandilands
Unprecedented competition for business travellers is breaking out in Asia and the Pacific and even on routes over the North Pole.
It's not just competition between airlines but between airports.
It's as much Changi Airport versus Chek Lap Kok versus Pudong (Shanghai), as it is Singapore International Airlines versus Cathay Pacific versus China Eastern.
Advances in aircraft range have also slashed travel times between all of Asia and North America, pitting the Singapore and Hong Kong hubs and their major carriers into a contest to exploit the new "high polar" frontier.
Add in the ambitions of Dubai (Emirates) and Doha (Qatar Airways) to become the "new" Changis for central Asia, the former eastern bloc and all of Europe, plus a multibillion-dollar investment by Qantas in new jets and lounges specifically for Asia flights, and the market is shaping up to be super competitive.
According to Ian Thomas, at the Centre for Asia Pacific Aviation, "We are seeing all the investments in new fleet, new service concepts and route development that were put on hold by 9/11, Iraq and Sars being released in essentially the same interval. Asia is the crucible for these new ideas because it has the most profitable airlines and - Qantas included - by far the strongest airline brands in the world".
Thomas says business traveller optimism in the key economies in the Asia-Pacific hemisphere is at an all-time high, which explains why carriers like Qantas, Singapore Airlines, Cathay Pacific, All Nippon and Japan Airlines are spending lavishly to shore up their premium cabin customers.
"They are also paying more attention than ever to the mass market in economy class too, which at the centre we identify as recognition that tens of millions of 'new' travel consumers keen to take holidays abroad are being created by economic growth in the region," he says.
Qantas chief executive Geoff Dixon says: "The outlook for international travel has become strong and our key routes are performing at, or near, record levels."
This strong outlook for the region means a lot is happening.
By year's end, Qantas will have five new Airbus A330-300s, replacing its old two-class Boeing 767-300ER jets to Singapore, Hong Kong and other routes, all equipped with the new business-class Skybeds and improved audio-video entertainment systems.
It will be flying between Hong Kong and London four times a week in each direction with Boeing 747-400s, again with all of the latest cabin enhancements, including send and receive-reply SMS messaging from any seat. As soon as the traffic rights permit, Qantas will go daily to London via Hong Kong.
But Qantas will also come up against Virgin Atlantic as Richard Branson and Singapore Airlines (which owns 49 per cent of the carrier) make good his ambition to link London and Sydney via Hong Kong.
The commercialisation of Hong Kong's airport and reforms making the Special Administrative Region's bilateral traffic arrangements more widely available to other carriers have also made possible the new flights by Virgin Atlantic and the extension of Qantas's rights to London via northern Asia.
But that liberalisation will result in Dragonair (in which Cathay Pacific is a minority stakeholder) starting flights to Sydney next year.
Dragonair and Cathay Pacific have been trying to rip strips off each other at any opportunity as Cathay's once close ally expands its cargo and intra-Asia network into its traditional turf. The Australia market looks like becoming the biggest test yet of their increasingly turbulent relationship.
Cathay Pacific has won what looks like grudging access to Beijing, with a token three services a week, or about one-tenth the access available to Dragonair. But Dragonair has long been the inside-China carrier of choice for regular Australian visitors to Shanghai, Xiamen and other centres.
It is the antithesis of "budget", even installing sleeper seats last year in a first-class cabin never flown more than about 150 minutes in any direction from Hong Kong.
Hong Kong-London is but part of the Qantas expansion.
In the next six to seven months it starts its own flights to Shanghai from Sydney, in addition to its code share with China Eastern, and to Mumbai, which was Bombay last time it flew there with newfangled 707 jets in the 1960s.
The phenomenal growth of business and inbound tourism travel in the Indian and mainland China markets points to a likely redrawing in the shorter term of Qantas schedules to London to allow frequent stopovers through both those cities as well as Bangkok, Singapore and (from November) Hong Kong.
Nor has speculation that Qantas will launch non-stops between Perth and London subsided. It would if it happens to use the same ultra long-range Airbus A340-500 that Singapore Airlines is using for non-stop services from its Changi hub to both Los Angeles and Newark (for New York City).
On July 1, Cathay Pacific will redeploy its larger A340-600s to non-stop service between Hong Kong and New York's JFK airport.
These high-polar flights cut up to six hours off Asia-Big Apple travel times, and the pitch in Australia is that they make it more practical to combine Asia and North America in the one itinerary than before.
The London via Hong Kong route has always been a mainstay for Cathay Pacific. The clash between Cathay Pacific, Qantas and Virgin Atlantic will be interesting because Branson's "upper class" version of business class is radically different to anything else in the skies.
Each "suite" is arranged at nearly right angles to the wall or cabin centre line, with a large ottoman that can be used as a facing seat, and a main seat that flips over to form a flat and, most importantly, truly horizontal bed. And there is a real bar with bar stools, in-flight masseuse and beauty treatments, and awesome motor cycle transfers for the brave in London.
Virgin Atlantic is also going to fly a premium economy-class product, something only available until now in Australia on the few British Airways flights that still operate through its joint-services agreement with Qantas on the kangaroo routes. China Eastern and China Southern both have Hong Kong in a pincer move, expanding very keenly priced business and economy-class flights through Shanghai on one flank and Guangdong on the other.
A new element in the competition between hubs opens next February when the new Nagoya Airport, renamed the Central Japan International Airport, opens with connections to major Japanese destinations that are time competitive with those from Tokyo's infamously inconvenient Narita Airport.
The "Emirates effect" is consuming a lot of strategic energy at Qantas, some of which surfaced in its submissions to the appeal against the ACCC's rejection of its planned merger of interests with Air New Zealand.
New Zealand's open-skies policies are so open that Emirates or anyone else is effectively free to set up a hub at Auckland, or Christchurch, where Virgin Blue has located Pacific Blue.
By the end of the year, Emirates could have double daily trans-Tasman flights out of Sydney and Melbourne, and dailies out of Brisbane. If that looks like overkill, it would be - until you check out the windfall air freight Emirates is carrying on the routes where Air NZ and Qantas lost too much cargo capacity when they decided to slug it out with small jets with inferior container space.
The most immediate concern for Qantas is that Emirates will start flying non-stop Auckland-New York City by the middle of next year when it gets more jets. Valuable frequent flyers are there to be seduced by the first airline that can avoid the frustrations of two sets of US security protocols between Sydney and Manahattan.
And Air Tahiti Nui, which returns to the Sydney-Papeete route soon, intends to offer Sydney-Papeete-New York flights twice a week early next year.
Going eastbound, Emirates, Gulf and Qatar (which inaugurates services to Melbourne late this year) are all hubbing at Middle East Airports that avoid the tedious Heathrow backtrack for those who find themselves flying to London on their way to Sofia, Barcelona, Budapest, Athens, Glasgow, Warsaw or Zurich.
Eliminating London from the loop saves up to 12 hours because of the grindingly frustrating inefficiency of transits involving Heathrow or, for the really unlucky traveller, Heathrow and Gatwick.
Qatar is spending more than $US15billion ($21.2 billion) on a massive redevelopment of Doha Airport to rival Dubai, Singapore or Hong Kong.
The stakes in product innovation have been raised high by Emirates. It includes private first-class suites with room service and full-length beds under a planetarium ceiling at night, but 500 audio-visual channels on demand in economy.
Air New Zealand, the carrier most at risk from Emirates's ambitions, has just announced an order for eight Boeing 777-200s and two of the stylish Boeing 7E7 Dreamlines. The 777s will give it an advantage across the Pacific with the most spacious economy seating flown in any jet today, starting from next September, while the Dreamliner, has comfort innovations in all classes.
===========================================
Battle warms up for Asia and Pacific crowded skies
Jun 17
Ben Sandilands
Unprecedented competition for business travellers is breaking out in Asia and the Pacific and even on routes over the North Pole.
It's not just competition between airlines but between airports.
It's as much Changi Airport versus Chek Lap Kok versus Pudong (Shanghai), as it is Singapore International Airlines versus Cathay Pacific versus China Eastern.
Advances in aircraft range have also slashed travel times between all of Asia and North America, pitting the Singapore and Hong Kong hubs and their major carriers into a contest to exploit the new "high polar" frontier.
Add in the ambitions of Dubai (Emirates) and Doha (Qatar Airways) to become the "new" Changis for central Asia, the former eastern bloc and all of Europe, plus a multibillion-dollar investment by Qantas in new jets and lounges specifically for Asia flights, and the market is shaping up to be super competitive.
According to Ian Thomas, at the Centre for Asia Pacific Aviation, "We are seeing all the investments in new fleet, new service concepts and route development that were put on hold by 9/11, Iraq and Sars being released in essentially the same interval. Asia is the crucible for these new ideas because it has the most profitable airlines and - Qantas included - by far the strongest airline brands in the world".
Thomas says business traveller optimism in the key economies in the Asia-Pacific hemisphere is at an all-time high, which explains why carriers like Qantas, Singapore Airlines, Cathay Pacific, All Nippon and Japan Airlines are spending lavishly to shore up their premium cabin customers.
"They are also paying more attention than ever to the mass market in economy class too, which at the centre we identify as recognition that tens of millions of 'new' travel consumers keen to take holidays abroad are being created by economic growth in the region," he says.
Qantas chief executive Geoff Dixon says: "The outlook for international travel has become strong and our key routes are performing at, or near, record levels."
This strong outlook for the region means a lot is happening.
By year's end, Qantas will have five new Airbus A330-300s, replacing its old two-class Boeing 767-300ER jets to Singapore, Hong Kong and other routes, all equipped with the new business-class Skybeds and improved audio-video entertainment systems.
It will be flying between Hong Kong and London four times a week in each direction with Boeing 747-400s, again with all of the latest cabin enhancements, including send and receive-reply SMS messaging from any seat. As soon as the traffic rights permit, Qantas will go daily to London via Hong Kong.
But Qantas will also come up against Virgin Atlantic as Richard Branson and Singapore Airlines (which owns 49 per cent of the carrier) make good his ambition to link London and Sydney via Hong Kong.
The commercialisation of Hong Kong's airport and reforms making the Special Administrative Region's bilateral traffic arrangements more widely available to other carriers have also made possible the new flights by Virgin Atlantic and the extension of Qantas's rights to London via northern Asia.
But that liberalisation will result in Dragonair (in which Cathay Pacific is a minority stakeholder) starting flights to Sydney next year.
Dragonair and Cathay Pacific have been trying to rip strips off each other at any opportunity as Cathay's once close ally expands its cargo and intra-Asia network into its traditional turf. The Australia market looks like becoming the biggest test yet of their increasingly turbulent relationship.
Cathay Pacific has won what looks like grudging access to Beijing, with a token three services a week, or about one-tenth the access available to Dragonair. But Dragonair has long been the inside-China carrier of choice for regular Australian visitors to Shanghai, Xiamen and other centres.
It is the antithesis of "budget", even installing sleeper seats last year in a first-class cabin never flown more than about 150 minutes in any direction from Hong Kong.
Hong Kong-London is but part of the Qantas expansion.
In the next six to seven months it starts its own flights to Shanghai from Sydney, in addition to its code share with China Eastern, and to Mumbai, which was Bombay last time it flew there with newfangled 707 jets in the 1960s.
The phenomenal growth of business and inbound tourism travel in the Indian and mainland China markets points to a likely redrawing in the shorter term of Qantas schedules to London to allow frequent stopovers through both those cities as well as Bangkok, Singapore and (from November) Hong Kong.
Nor has speculation that Qantas will launch non-stops between Perth and London subsided. It would if it happens to use the same ultra long-range Airbus A340-500 that Singapore Airlines is using for non-stop services from its Changi hub to both Los Angeles and Newark (for New York City).
On July 1, Cathay Pacific will redeploy its larger A340-600s to non-stop service between Hong Kong and New York's JFK airport.
These high-polar flights cut up to six hours off Asia-Big Apple travel times, and the pitch in Australia is that they make it more practical to combine Asia and North America in the one itinerary than before.
The London via Hong Kong route has always been a mainstay for Cathay Pacific. The clash between Cathay Pacific, Qantas and Virgin Atlantic will be interesting because Branson's "upper class" version of business class is radically different to anything else in the skies.
Each "suite" is arranged at nearly right angles to the wall or cabin centre line, with a large ottoman that can be used as a facing seat, and a main seat that flips over to form a flat and, most importantly, truly horizontal bed. And there is a real bar with bar stools, in-flight masseuse and beauty treatments, and awesome motor cycle transfers for the brave in London.
Virgin Atlantic is also going to fly a premium economy-class product, something only available until now in Australia on the few British Airways flights that still operate through its joint-services agreement with Qantas on the kangaroo routes. China Eastern and China Southern both have Hong Kong in a pincer move, expanding very keenly priced business and economy-class flights through Shanghai on one flank and Guangdong on the other.
A new element in the competition between hubs opens next February when the new Nagoya Airport, renamed the Central Japan International Airport, opens with connections to major Japanese destinations that are time competitive with those from Tokyo's infamously inconvenient Narita Airport.
The "Emirates effect" is consuming a lot of strategic energy at Qantas, some of which surfaced in its submissions to the appeal against the ACCC's rejection of its planned merger of interests with Air New Zealand.
New Zealand's open-skies policies are so open that Emirates or anyone else is effectively free to set up a hub at Auckland, or Christchurch, where Virgin Blue has located Pacific Blue.
By the end of the year, Emirates could have double daily trans-Tasman flights out of Sydney and Melbourne, and dailies out of Brisbane. If that looks like overkill, it would be - until you check out the windfall air freight Emirates is carrying on the routes where Air NZ and Qantas lost too much cargo capacity when they decided to slug it out with small jets with inferior container space.
The most immediate concern for Qantas is that Emirates will start flying non-stop Auckland-New York City by the middle of next year when it gets more jets. Valuable frequent flyers are there to be seduced by the first airline that can avoid the frustrations of two sets of US security protocols between Sydney and Manahattan.
And Air Tahiti Nui, which returns to the Sydney-Papeete route soon, intends to offer Sydney-Papeete-New York flights twice a week early next year.
Going eastbound, Emirates, Gulf and Qatar (which inaugurates services to Melbourne late this year) are all hubbing at Middle East Airports that avoid the tedious Heathrow backtrack for those who find themselves flying to London on their way to Sofia, Barcelona, Budapest, Athens, Glasgow, Warsaw or Zurich.
Eliminating London from the loop saves up to 12 hours because of the grindingly frustrating inefficiency of transits involving Heathrow or, for the really unlucky traveller, Heathrow and Gatwick.
Qatar is spending more than $US15billion ($21.2 billion) on a massive redevelopment of Doha Airport to rival Dubai, Singapore or Hong Kong.
The stakes in product innovation have been raised high by Emirates. It includes private first-class suites with room service and full-length beds under a planetarium ceiling at night, but 500 audio-visual channels on demand in economy.
Air New Zealand, the carrier most at risk from Emirates's ambitions, has just announced an order for eight Boeing 777-200s and two of the stylish Boeing 7E7 Dreamlines. The 777s will give it an advantage across the Pacific with the most spacious economy seating flown in any jet today, starting from next September, while the Dreamliner, has comfort innovations in all classes.
===========================================