Singapore Airlines CEO Goh Choon Phong told the meeting of top regional airline executives on Friday that he was encouraged by the rebound in demand, with international passenger capacity among Asia-Pacific carriers hitting about 73 per cent of pre-pandemic levels in September.
But he added that “familiar headwinds” were also returning, which also included rising inflation, as well as international tensions, fuel costs and other problems.
“These could have a negative impact on our operations, our costs and the growth in air travel,” Goh, who represented the host airline, said at the opening of the Association of Asia-Pacific Airlines (AAPA) assembly of presidents.
Subhas Menon, the association’s director general, added supply chain problems came up several times in discussions among the 14 member airlines on Friday as a major stumbling block that needed to be tackled.
“It is a big hurdle for many airlines to put back the requisite capacity to meet the demand,” he said. “It is at all levels, from aircraft and parts to basic things like products on the aircraft.”
He added that the geopolitical situation, including in conflict zones, had an impact on supply chains and appealed to governments to play a part in trying to improve the flow of necessities.
Conrad Clifford, the deputy director of the International Air Transport Association (IATA) said that the challenge for airlines was how to be profitable in tough market conditions, such as high oil prices, expensive airport charges and reduced capacity because of engine and spares parts difficulties.
Thai Airways CEO Chai Eamsiri, speaking as a part of panel discussion, highlighted how supply chain difficulties were a particular pain point.
He said it was difficult to find spare parts to maintain modern taps with electronic sensors in aircraft toilets.
“We are thinking of going back to the old days and using mechanical taps. It is more reliable and easy to maintain,” he said.
China demand crucial to restoring Singapore Airlines’ flight capacity, CEO says
China demand crucial to restoring Singapore Airlines’ flight capacity, CEO says
Asian carriers, including Singapore Airlines and Japan Airlines, added that mainland China’s appetite for outbound travel to their countries had still to recover to pre-pandemic levels.
The industry had banked on the return of Chinese travellers overseas, but the numbers were climbing slower than had been hoped.
Menon said on Thursday he expected mainland Chinese traffic to be close to a return to pre-coronavirus numbers by the middle of next year.
China was the largest air travel market before the pandemic and accounted for 20 per cent of Asia-Pacific’s international traffic, but was only 10 per cent this year.
Cathay Pacific’s CEO Ronald Lam Siu-por said, as the carrier rebuilt its traditional routes back post-pandemic, a “key consideration” was the balance between Hong Kong and Chinese mainland routes with Hong Kong and international services.
“For the moment, between China and the United States, direct flight resumption is still very low and increasing incrementally,” Lam said.
Hong Kong’s Cathay tackles staff shortages, poor morale as it chases rivals
Hong Kong’s Cathay tackles staff shortages, poor morale as it chases rivals
Cathay at present operates flights to five destinations in the United States, New York, Los Angeles, San Francisco, Boston and Chicago.
Mainland Chinese and US airlines were allowed 24 weekly flights each from October, but, pre-pandemic, there were around 350 flights a week between the two countries.
Philip Goh, the regional vice-president, Asia-Pacific at IATA, told the Post on the sidelines of the event that Cathay had benefited from the tensions between the US and China, which had seen direct flights between the two countries capped at low levels.
“It’s not just Americans – there are many Hongkongers in the US,” he said.
“There are other nationals in China that want to fly, but not enough capacity. So they will go via Hong Kong.”
The theme of the conference was “sustainable air transport growth in the Asia-Pacific”.
Clifford said the region would need to move fast towards the use of sustainable aviation fuels (SAF), as it will play the biggest part in reaching the airlines’ carbon neutral goal by 2050.
The 14 member airlines agreed on Friday to an aspirational collective target to use a blend of five per cent sustainable aviation fuel (SAF) by 2030.
AAPA’s members include Malaysia Airlines, Air Astana, Singapore Airlines, Garuda Indonesia, Royal Brunei Airlines, Thai Airways, Cathay Pacific Airways, Air Nippon Airways, Air India, Bangkok Airways, Eva Air, Philippine Airlines, Japan Airlines and China Airlines.