AAPA factfile
Organisation: Association of Asia Pacific Airlines
Web address: www.aapairlines.org
Headquarters: Kuala Lumpur, Malaysia
Year founded: The organisation traces its history back to 1965, although it was renamed in 1996 to better reflect the membership’s geographical spread.
Membership: 17 scheduled international airlines based in the Asia-Pacific region.
What are the best strategies to see Asia Pacific airlines through the recession?
Asian airlines are responding with progressive adjustments to both capacity and route networks. Rapidly changing market conditions call for nimbleness and adaptability. All businesses must strive to reduce costs in line with falls in demand, whilst positioning for an eventual recovery. In the case of airlines, that means making every effort to preserve a highly skilled workforce, whilst seeking to reduce costs through such measures as reduced overtime, short time working, voluntary unpaid leave and early retirement schemes. However, the extremely difficult conditions will see many carriers suffering losses, often made worse by the burden of fuel hedging contracts fixed in the earlier part of 2008 at much higher prices. Asian carriers with strong brands and balance sheets are better placed to survive the current downturn and emerge even more strongly when the economy picks up again.
What advantages do Asia-Pacific airlines have over others?
Asia-Pacific carriers are global leaders in service quality with world class premium product offerings. Clearly, in an economic downturn, our customers are looking to cut costs, including trading down from premium seats in first and business class, particularly on shorter routes. Nevertheless, Asian carriers are expected to maintain their quality advantage whilst remaining price competitive in all segments. The benefits of lower oil prices are already being reflected in extremely competitive fares across all routes, which hopefully will encourage people to keep flying for both business and leisure. Travel and tourism is a key contributor to successful economic and social development, particularly here in the Asia-Pacific region. We will continue to work closely with airports, hotels and other industry partners to make sure that travel retains its appeal, even in a downturn.
In what areas of the business is it imperative to keep investing?
Regardless of market conditions, safety always remains the air transport industry’s number one priority. Asia-Pacific carriers achieved the very highest standards of safety last year and we will be maintaining that level of vigilance in 2009 to ensure that safety performance remains comparable with major airlines in the United States and Europe.
Many commentators say that environmental issues have fallen off the agenda in the face of the recession. Do you agree?
Environmental challenges, including climate change, remain important. Attention is focused on the need for governments to reach agreement on a post-2012 policy framework, with an important UNFCCC meeting on climate change due to take place in Copenhagen in December 2009. The commercial aviation industry remains firmly focused on environmental issues and supports the medium term goal of “carbon-neutral growth”, through a combination of technology, operations and infrastructure improvements, the development of biofuels and appropriate economic measures. AAPA is calling upon governments to work towards globally harmonised policies on aviation and the environment, including backing for air transport industry focused environmental research and development programmes; infrastructure improvements to reduce unnecessary carbon emissions; and properly designed market-based measures, including a global emissions trading scheme. We are, however, firmly against the unilateral imposition of punitive “green taxes” that in reality do nothing for the environment. Examples of this can already be seen in the UK Aviation Passenger Duty.
This article is featured in Routes News 2009 Issue 2
