Home' Asian Aviation : AAV April 2011 Contents AsianAviation | APRIL 2011 37
Q: What has changed in the industry
since the last Asian Aerospace
A: Two years ago, we were in the depths of the
downturn. I was trying to express some optimism
about the first signs of an upturn and I was
trying to project a positive view of that which
wasn t commonly accepted wisdom at that time.
Now, you look at the graphs and it s a very sharp
V-shaped recovery and we all enjoyed that in 2010.
You see that in the results of the airlines.
Q: You're confident that that will
A: Well, the long-term growth dynamic hasn t
changed, and even in the depths of that downturn
we still had faith in the future. But it was tough.
And it was tougher for people in Asia, because
their business is basically skewed towards premium
tra c, long-haul and cargo, so there was no hiding
place. So you had the situation where Cathay
[Paci c Airways] was reporting big losses and
Singapore Airlines was barely pro table. en
you get the ipside of that. When things pick
up, everything picks up, and so [you have] very
strong revenue performance and that translates
into good bottom-line performance. For this
year, I m optimistic. e long-term growth story s
still intact. We re talking single-digit growth --
traditional growth levels, but compounding it over
time and airlines are planning on that basis.
Q: Are you that optimistic for both
passenger and cargo traffic?
A: Well, cargo had this huge slump, huge rebound
and it s hard to separate out what the current
trend is for this year. It s a bit so in some places --
outbound from China [for example]. But I think
we re probably back to a more normal seasonal
pattern, where January, February -- depending on
the Chinese New Year -- starts o , the March is
o en pretty good, then April-May-June is rather
so , and then you get the big seasonal peak July
through to the end of the year. So trying to forecast
what the growth s going to be at the midpoint [is
di cult]. It s probably just the long-term growth
rate. So: 6 [percent]?
Q: Do you anticipate a lot more fleet
expansion this year?
A: Well, a lot of orders have been placed. Both
Boeing and Airbus have got six-year backlogs,
so these are incremental orders. e planning
horizon is long, because there s a backlog, so you re
talking in terms of what we need in ve to seven
years time. at s what we need to place orders
for now. So I don t think it re ects a change of
view about the future, it s just business as usual in
terms of which aircra and when. Obviously, the
uncertainty is when will the 787 nally enter into
ser vice, will the A350 face delays, the 747-8 has
also faced its fair share of di culties, and the A380.
So, overall, you ve got the backlog and you ve still
got this uncertainty about new programmes. But
people are just ordering equipment based on their
projected growth rates and retirement plans for
the existing eet, and supply and demand should
be pretty much in balance. I don t detect a lot of
Q: Looking forward, what are the
key challenges facing the AAPA?
A: We are a trade association so we re focused very
much on regulatory issues. is is an extremely
heavily regulated industry, both technically and
non-technically. If you re in the international
aviation business, you are bound by multiple
overlapping and o en-contradictory regulations.
AAPA faces regulatory challenges
The Association of Asia Pacific Airlines (AAPA) comprises 17 of the region's largest carriers, which collectively handle
about 285 million passengers and 10 million tonnes of cargo a year. AAPA Director General Andrew Herdman spoke
with Asian Aviation's Andrzej Jeziorski during the Asian Aerospace 2011 show in Hong Kong.
Herdman says airline fleet planning is affected by uncertainty about entry-into-service dates for new types such as the Boeing 787.
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