CAPA: Philippine Airlines Seeks A Strategic Investor As International Expansion Continues


philippine-airlines

ANA: Not Planning To Invest In PAL

Attracting an investor from the airline sector has so far proven challenging. All Nippon Airways (ANA) emerged as a potential suitor in 2013 as part of the Japanese carrier’s initiative to invest in foreign airlines with focus on Southeast Asian market.

But ANA has since ruled out an investment in PAL. ANA also has decided not to complete a planned investment in small Myanmar carrier Asian Wings, which when announced in Aug-2013 was seen as a toe in the water with the idea it would be followed by larger investments in Southeast Asian airline sector.

ANA’s rival Japan Airlines also has been ruled out as a potential investor in PAL. Japan was a logical place for PAL to turn as Japan is PAL’s largest market accounting for about 22% of the carrier’s international seat capacity.

PAL currently operates 63 weekly flights to five Japanese destinations (FukuokaNagoya, Osaka, Tokyo-Haneda and Tokyo-Narita), according to OAG data. But synergies with Japanese carriers are relatively limited. ANA and JAL are strong competitors in the Philippines-US market.

PAL is now planning to expand its US operation, which is made possible by Philippine authorities securing a Category 1 rating from the US FAA earlier this year. As PAL expands in North America it will try to woo away passengers that have been flying via North Asian hubs including Tokyo, Hong KongSeoul and Taipei, thus increasing the competitive posture towards airlines from those countries.

Japan is an important and growing source market for the Philippines tourism sector. But Philippines-Japan is primarily a leisure point to point market and seemingly is not of sufficient importance to Japanese carriers to justify an investment. There are also limited opportunities to offer Japanese passengers connections beyond Manila.

Securing Investment from Korean Carriers Would Be Challenging

South Korea is also an important and growing source market for Philippine tourism sector. South Korea is PAL’s second largest market based on current seat capacity and is served with 46 weekly flights across five routes (Seoul to Cebu, Kalibo and Manila and Busan to Kalibo and Manila).

Korean Air and Asiana each have large presences in Philippine market, supported by strong inbound demand from Korea as well as sixth freedom traffic, particularly to North America.

Asiana is the second largest foreign carrier in Philippine market based on seat capacity and currently has 39 weekly flights to the Philippines while KAL is the fourth largest and has 23 weekly flights. It is similarly hard to build a business case for a Korean carrier to invest in PAL.

As is the case with Japanese carriers, potential opportunities for Korean carriers to use Manila as a transit hub for other regions of Asia are limited. San Miguel has talked up building Manila into a transit hub. PAL is generally not well positioned for this type of traffic and will need to compromise yields to attract passengers in markets such as Australia-London and Singapore-North America.

And potential North Asian partners would be impacted if PAL were to pursue this type of traffic aggressively. While an investment seems unlikely PAL could still use partners in Korea and Japan. A Korean and/or Japanese partner would help with local point of sales and connections to secondary cities in Japan.

A Japanese or Korean carrier could also potentially help provide offline coverage to smaller North American markets which PAL does not intend to cover on its own.

Cathay Pacific Codeshare Or Relationship With A Chinese Carrier Is Unlikely

Currently PAL has codeshare with only two North Asians carriers, Air Macau and Cathay Pacific. But both partnerships are limited. The Air Macau codeshare is limited to the MNL-Macau route, which is currently served only by PAL (as well as Cebu Pacific).

The Cathay codeshare is limited to the CEB-HKG route, which is only served by Cathay (as well as Cebu Pacific). The Cathay partnership excludes the much larger and more competitive MNL-HKG route or any destinations beyond Hongkong.

The Cathay-PAL partnership is unlikely to be extended as Cathay competes with PAL in several key PAL markets including Philippines-North America, Philippines-Middle East and Philippines-North Asia. Cathay is now the largest foreign carrier in the Philippines with 43 weekly flights and 12,000 one-way seats.

Cathay regional subsidiary Dragonair also operates nine weekly flights to the Philippines, giving the Cathay group about 25,000 weekly seats and over 5% of capacity in Philippine international market. A partnership with a mainland Chinese carrier would be more appealing as PAL only now serves four destinations in mainland China with a combined 22 weekly return flights.

But a strong partnership or investment from a Chinese carrier may be made less likely in view of the tense state of relations between China and the Philippines. A partnership with a Taiwanese carrier would be more conceivable but again would likely be relatively limited.

Taiwan is a much smaller local market for the Philippines than Hong Kong, Korea or Japan. PAL has only 11 weekly frequencies to Taiwan while China Airlines and EVA Air serve the Philippines with 20 weekly flights and seven weekly flights respectively. The close proximity of Taipei and Manila mean the two hubs compete for traffic and are not synergistic.

Singapore Airlines: Not A Likely Suitor for PAL

PAL’s codeshare partnerships in Southeast Asia are also relatively limited. Currently PAL has codeshares with Garuda IndonesiaMalaysia Airlines (MAS) and Vietnam Airlines.

Garuda and Vietnam Airlines currently do not serve Manila although Garuda is planning to enter the Jakarta-Manila route by the end of 2014.

The MAS codeshare initially provided PAL with offline access to Kuala Lumpur and has been maintained since PAL resumed services to Kuala Lumpur in early 2013. None of these airlines are in position to invest in PAL or any other foreign carrier.

A partnership with Singapore Airlines (SIA) would be more intriguing as Singapore is by far the largest Southeast Asian market from the Philippines. There are currently over 60,000 weekly seats between Singapore and the Philippines, making it the Philippines largest market after South Korea. But there would be limited synergies for SIA.

PAL is not believed to be on SIA’s list of potential acquisition targets.

PAL Forges A New Partnership With Etihad

In recent years most of PAL’s codeshare partners have been from the Mideast. PAL currently codeshares with Emirates and Gulf Air, according to OAG data. But PAL also previously codeshared with Etihad and Qatar Airways.

Most of its codeshares with Gulf carriers were forged during a period when PAL did not operate any services to the Middle East. In some cases Philippine authorities allowed PAL to have its codeshare partners use PAL traffic rights to Middle East countries, which enabled Gulf carriers to continue expanding in Manila after their own traffic rights were exhausted.

PAL and other Philippine carriers have since taken back most of these traffic rights. In 2H2014 PAL launched Abu Dhabi, Dubai, Dammam and Riyadh services (Dubai is served by PAL Express).

Cebu Pacific launched Dubai and is planning to launch Kuwait in Sep-2014. (Cebu Pacific also has been looking to serve Saudi ArabiaOman and Qatar.) PAL forged a partnership agreement with Etihad in late Apr-2014 that builds on the original codeshare between two carriers.

The two carriers announced on 9-Jul-2014 that the new partnership will initially cover the Manila-Abu Dhabi route, which Etihad and PAL both operate. For now the only extension announced beyond the parallel routing is to be on PAL/PAL Express services to 20 Philippine destinations, including holiday destinations such as Cebu, Palawan and Kalibo (a gateway to Boracay Island).

Etihad has said it has no intention of acquiring a stake in PAL. While an investment is always a future possibility for any carrier Etihad partners with, PAL has a better chance of finding a suitor within Asia – although even there it faces an uphill battle to secure an investment.

PAL recognizes the need to work with a Gulf carrier to support its effort to build a more global network. PAL currently does not codeshare with any European carrier. The new Etihad partnership could potentially be extended to destinations beyond Abu Dhabi in continental Europe and Africa as well as secondary destinations in the Mideast.

Much of the foundation for Philippine services to the Mideast is in carrying migrant worker traffic, but Gulf countries in particular have shown increasing interest in holidaying in friendly countries outside the region.

PAL has been looking at launching several potential destinations in continental Europe including AmsterdamFrankfurt, Paris and Rome. One or two European destinations may still be added over the medium term but following the Category 1 upgrade by the US FAA it is more likely to focus on expanding in the US market.

As PAL’s only current European destination is London, which is not generally considered a convenient hub for Asia to Europe connections, using Etihad and the Abu Dhabi hub to cover the rest of Europe would be a sensible move.

PAL Expands In US But Lacks A US Partner

In US, PAL currently serves Los AngelesSan FranciscoHonolulu and Guam. Restoration of Category 1 status has allowed PAL to shift all its LAX and some  its SFO flights to the 777-300ER.

PAL plans to shift its remaining San Francisco 747-400 flights to the 777-300ER at the beginning of Sep-2014. This will allow PAL to finally retire its 747-400s after an initial plan to retire the fleet in May-2014 had to be postponed.

Moving the 777-300ERs to the US market improves PAL’s product and efficiency but comes with a catch as PAL has to transition its Vancouver and Toronto services from 777-300ERs to A340s to free up 777s for the US market. PAL currently serves LAX with 11 weekly frequencies, SFO with seven weekly frequencies, GUM with five weekly frequencies and HNL with three weekly frequencies. Vancouver is served with seven weekly frequencies, three of which continue onto Toronto.

PAL has been looking at launching new destinations in the US in late 2014 or 2015. Chicago and New York are the most likely candidates. PAL is also planning to increase GUM and HNL to daily services from late Oct-2014. PAL uses A320s to GUM and A340s to HNL.

The increases in these markets come ahead of Cebu Pacific’s planned launch of services to the US, which is also made possible by the Philippines regaining a Category 1 ranking. Cebu Pacific aims to launch Guam by the end of 2014 using its A320 fleet and begin serving Hawaii in 2015 using its A330-300s. Category 1 also enables Philippine carriers to codeshare with US carriers.

A codeshare partnership with a US carrier would improve PAL’s position in the US market as PAL would gain offline access to domestic destinations. But PAL could find it challenging to attract a US major and may have to settle for a codeshare or interline with a smaller carriers such as Alaska AirlinesJetBlue and Virgin America. Partnering with a top European carrier may also be challenging although this may not be as critical if its able to expand its new partnership with Etihad.

In addition to potentially providing offline access to Europe via Abu Dhabi, the Etihad partnership could lead to partnerships with European carriers that are part of the Etihad equity alliance such as Alitalia and airberlin.

Australia: Philippine Airlines vs. Cebu Pacific

PAL would also find partnership with an Australian carrier valuable, although options are few.

PAL is pursuing significant expansion in Australia. PAL currently operates four weekly A340 flights to Sydney, three weekly A340 flights to Melbourne and three A320 flights to Darwin, with continuing service to Brisbane.

PAL plans to upgrade Sydney to daily in late Oct-2014. At about the same time PAL reportedly is intending to upgrade Melbourne to daily and begin non-stop flights to Brisbane and Perth. PAL briefly served Perth in 2013 with four weekly flights via Darwin but quickly dropped the route while maintaining Manila-Darwin-Brisbane.

The Australia expansion comes just as Cebu Pacific enters the Philippines-Australia market. Cebu Pacific plans to initially operate four weekly flights to Sydney from Sep-2014 and is looking at adding Melbourne in 2015. While Cebu Pacific should stimulate new demand, overcapacity is likely if PAL implements its plan to double capacity to Australia.

Overcapacity is also likely in the Hawaii and Guam markets as both PAL and Cebu Pacific expand. Overcapacity has already resulted in the Philippines-UAE market after both PAL and Cebu Pacific entered the market in 2H2014. Both carriers have also been pursuing significant expansion to Japan.

The prospect of overcapacity and irrational competition results in a relatively gloomy short to medium term outlook for the Philippine international market. The inevitable discounting has the potential to stimulate new business but there is no indication just how the market would respond to lower prices.

 

Source: http://centreforaviation.com/, Centre for Aviation

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Analysis: Is Small The Next Big Thing?


Cebu Pacific Air
Cebu Pacific Air

 

Asia’s airline industry is booming as local competition heats up with fleet expansions, new routes and an array of financing options. “In terms of aircraft numbers, Asia-Pacific has become a bigger market than Europe, second only to North America, and the projections are that it will grow at a really fast rate,” says Saugata Mukherjee, an aviation finance specialist and asset and structured finance partner at Stephenson Harwood in Singapore. Southeast Asian low-cost carriers like AirAsia, Lion Air, and Cebu Pacific have driven much of the growth, placing orders for hundreds of Airbus A320s and Boeing 737s. VietJet Aviation Joint Stock Co, Vietnam’s first private airline, agreed last September to a provisional order for up to 92 Airbus jets worth $9 billion, while Singapore’s Tiger Aiways placed an order in March for 37 Airbus A320neo aircraft valued at $3.8 billion at list prices. “The established legacy carriers are under increasing pressure from low-cost carriers,” says Leo Fattorini, a partner in Bird & Bird’s international aviation group in Singapore.

Vietnam in particular is tipped to spark competition among airlines and manufacturers. Even as the nation’s local economy grows at about 5 percent – its slowest pace in 13 years – demand for domestic air travel is experiencing double-digit growth. The International Air Transport Association expects Vietnam to become the world’s third-fastest growing market for international passengers and freight next year, and second-fastest for domestic passengers.  While this is likely to translate into a robust new source of business for aircraft makers like Boeing and Airbus, regional manufacturers like Canada’s Bombardier, Brazil’s Embraer, European joint venture ATR, Russia’s Sukhoi and Japan’s Mitsubishi Aircraft also stand to benefit.

 

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Tiger Airways

Carving Out a Niche

After flying under the radar for many years, manufacturers of smaller jet and propeller-driven passenger aircraft are gaining traction in Asia. Embraer forecast that the region will take delivery of 1,500 new jets of 70 to 130 seats over the next 20 years. That translates, it says, to a staggering $70 billion worth of business. The Singapore Airshow in February underscored this trend, with smaller aircraft makers picking up a slew of new orders. Thai low-cost carrier Nok Air said that it would order up to eight of Bombardier’s Q400 turboprop aircraft. ATR meanwhile, inked a deal to sell up to eight of its 72-600 aircraft to Thai carrier Bangkok Airways. It also agreed to sell 20 aircraft to leasing firm Dubai Aerospace Enterprise, with options for 20 more, in a deal valued at $1 billion. Substantial numbers of ATR aircraft are being acquired by airlines in Indonesia, Malaysia, the Philippines and Myanmar, where a lot of routes aren’t yet developed enough to warrant an Airbus A320 or a Boeing 737, says Fattorini. “These ATR aircraft are ideal for these countries. They are relatively fuel efficient, robust and versatile, and can fly into airports where perhaps some of the larger jets can’t,” adds Fattorini.

Growing demand for services to and between smaller second- and third-tier cities has created a unique market suited to smaller aircraft. In a country like India, where Airbus and Boeing aircraft have saturated the market with airlines like IndiGo, SpiceJet and GoAir, start-up carrier Air Costa, which began operations last October, is trying to carve out a niche for itself by connecting the smaller cities with Embraer jets. “You don’t need larger aircraft. Regional air services have enormous potential in India,” Ramesh Lingamaneni, chairman of Air Costa, told Reuters. In February, the airline ordered 50 jets valued at $2.94 billion from Embraer, in what was the aircraft maker’s first major Indian deal. “The Air Costa model of looking at secondary cities is a very interesting one. It is a trend that we have and will continue to see across the entire region,” says Mukherjee.

Importantly, for the likes of Embraer and ATR, the world’s two largest aircraft manufacturers do not make aircraft that compete in the below-130 seat segment. “Right now, there are two different markets for aircraft. If you look at Lion Air for example, they use their Boeing 737s for the bigger primary city connections, but they also have an ATR fleet which captures a different market segment,” says Mukherjee. There is, however, some overlap between markets. Bombardier’s C Series offers a competitive alternative to the Airbus A320 and Boeing 737, but it is still yet to make an impression in the Asian market, says Mukherjee.

 

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AirAsia

Financing Options

As more carriers enter Asia’s lucrative aviation market, a range of financing options are readily available to fund fleet expansions. The choice of funding depends quite heavily on the carrier, says Fattorini. “Some of the top-tier established carriers still have very strong cash positions, despite increased pressure on their balance sheets. They often buy aircraft outright, or have the credit rating to be able to access loan finance at attractive rates,” says Fattorini.

For less-established carriers that do not boast the strongest balance sheets or the highest credit ratings, export credit agency (ECA) financing is often a preferred alternative. “Carriers typically start off with ECA financing because they either don’t have access to commercial funding, or they find commercial funding too expensive. But as they mature, commercial financiers come in and start helping them out, and their terms are usually more flexible than those offered by the ECA lenders,” says Mukherjee. For his part, Fattorini says that ECA finance has become more expensive and fallen slightly out of favour among airlines and lessors with stronger balance sheets as a result. But he adds that  a lot of historic orders still exist that are being backed by ECAs, as well as hybrid ECA deals which, depending on the ECA involved, could either be pre-funded or refinanced in the capital markets.

As the market matures, lawyers say the range of financing will extend increasingly into the capital markets space. “Right now, money is cheap. But, if the pricing environment changes – and it will – you will see enhanced equipment trust certificate (EETC) issuance increasingly by non-U.S. issuers. Non-ECA-backed airline bond financing will possibly start to play a role in Asia as well in the medium term,” says Mukherjee.

Another alternative for airlines is leasing, which is gaining popularity in Asia as carriers look to avoid owning a large fleet in favour of leaner balance sheets. In 2011, leased planes accounted for 36.5 percent of the worldwide fleet, according to Boeing data, up from less than 15 percent 20 years earlier. “The generally accepted view is that leasing will increase to about 40 or 50 percent of the market in the not too distant future,” says Fattorini.

A number of new leasing companies too have entered the Asian market, keen to increase and develop their portfolios. “There is definitely more competition between lessors now, and this is good news for airlines. As can be expected, there has also been some amount of consolidation between lessors through M&A activity and it is possible that there will be some further activity as the market evens out,” says Mukherjee.

 

Sharklet-fitted Airbus A320
VietJet

Shakeup For State Carrier

VietJet Aviation Joint Stock Co, Vietnam’s first private airline, agreed last month to a provisional order for up to 92 Airbus jets worth $9 billion at list prices. The low-cost carrier is aiming for a stock market listing in either Hong Kong or Singapore in 2015 to fund the expansion, Managing Director Luu Duc Khanh said. VietJet plans to double its fleet by 2015 to 20 jets, and is speeding up work to get three joint ventures in the air, including one with an undisclosed carrier in Myanmar and another agreed with Thailand’s KanAir, to operate in early 2014.

VietJet’s bold expansion after less than two years in business could raise the stakes not only at home, but also in Southeast Asia’s fast-growing low-cost market, dominated by Malaysia’s AirAsia Bhd and Indonesia’s Lion Air.

Those ambitious plans may have shaken state-run flag carrier Vietnam Airlines (VNA) into expediting its long-awaited initial public offering and fleet expansion. VNA dominates the local market and will increase its fleet by 28 percent to 101 aircraft by 2015. It has been preparing for an IPO in the second quarter of 2014.

Its fleet includes both Airbus and Boeing jets, and it has ordered the Boeing 787 Dreamliner and the Airbus A350. According to Boeing, VNA has existing orders for eight 787s and 11 more through leasing companies. The airline also has its hand in the low-cost market through a stake in JetStar Pacific, a joint venture with Australia’s Qantas Airways. JetStar plans to more than triple its fleet of five Airbus A320s to 16 in the next few years, a spokesman says.

VietJet’s joint venture plans were therefore a smart move, says Timothy Ross, an air transport analyst at Credit Suisse in Singapore. “I can’t imagine they have much on their balance sheet … so in terms of building a new business, it’s far better to give away some of the potential upside and invest less,” he says. JetStar has not been profitable and is likely to struggle as competition increases, Ross says, while VNA has not done itself any favours delaying privatisation. “We should have seen the Vietnam Airlines IPO three to five years ago, but it sat on its hands,” he says. “Competition in the airline industry is inevitable.”

Traditionally, lessors call the shots on leasing agreements, especially when dealing with newer carriers, says Fattorini. “But with a number of new lessors in the market, especially those from China who are eager to quickly build up their portfolios, airlines have more options than in recent years. As a result they should be in a relatively stronger negotiating position,” he says. Airlines should consider their pressure points and not be afraid to push hard for positions which make their lives operationally easier. An experienced lessor will never compromise on its ability to quickly recover its asset in a default scenario but on issues such as maintenance and use covenants, there’s likely to be much more flexibility, adds Fattorini.

For his part, Mukherjee thinks that a lessee negotiating contract terms also sends positive signals to the lessor. Lessors and lessees should pay attention to the operational or technical covenants of a lease. “When you maintain your fleet you have one standard and one technical team. If there is a higher standard on your operating lease you suddenly have a mismatch, which raises the standards that your technical team needs to have across the fleet,” says Mukherjee. “The technical team is not going to differentiate between the owned and leased aircraft because they use the same standard across the board. So from a lawyer’s perspective, you need to make sure that those covenants are as evenly set across the financing and leasing documents.”

In addition, Mukherjee highlights the aircraft return conditions of a lease as an important area for lessees to consider. “Lessors and lessees alike must ensure that the lessee’s technical team are well versed in the maintenance and return conditions set out in the lease. Return conditions, in particular, should be negotiated and agreed in relative detail by the lessors’ and lessees’ technical teams. What you don’t want is for a mismatch in contractual expectations and what the lessee’s technical team are capable of delivering. This is neither in the lessee’s interest nor is it good news for the lessor. For example the lessor may have arranged a re-lease of the aircraft with a third party airline. A failure to redeliver on time will lead to losses, and while the lessor can try and claim back its losses from the defaulting airline, it does not present a pretty picture,” he says.

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Lion Air

Boom Times Ahead

As the rivalry among airlines and aircraft manufacturers intensifies in Asia, it is bringing with it an increasing volume of business to the handful of law firms in the region that have aviation finance and aircraft leasing expertise. Some carriers, lessors and financiers in Asia still use lawyers who are based in London or New York, says Fattorini. “This is surprising as there are a number of firms with the right expertise in this region, and it makes the logistics of doing a deal much easier.” But this could change rather quickly as more business flows into Asia. And in an industry as niche as aviation finance and aircraft leasing, on-the-ground experience in the region is vital. For the year ahead at least, especially in Southeast Asia, leasing companies, financial institutions and law firms with dedicated aviation finance specialists are poised to profit from a booming airline industry as low-cost carrier activity surges and regional aircraft makers come to the fore.

Source:  Kanishk Verghese, Reuters

Gulf Carriers Heat Up Competition in Asia Pacific Airline Industry


EK

There is a giant shift taking place at the moment in the commercial aviation industry as the extraordinary growth of Gulf carriers continues to be felt around the world. There is no slowing down of the region’s ambition to conquer as many long haul routes as possible, and if there were ever any doubts, they would have been dashed by their gigantic wide-body aircraft order (+350) at the end of last year.

While Airbus and Boeing are sporting rather large smiles, airlines in Asia and other markets are finding themselves having to rethink their approaches. Emirates, Etihad Airlines and Qatar Airways find themselves in one of the most advantageous locations, connecting Europe to Asia, North and South America, Africa and India. Add the seemingly unending economical investment from the region, and global airlines are reshuffling their strategies to keep up.

EY

Asian low cost carriers are responsible for the world’s largest aircraft orders this year, but the competition for full service and low-cost carriers in Asia is only going to get hotter. Emirates are aggressively expanding, carrying 39 million passengers in 2013, and aiming for 70 million annual passengers by 2020 according to the carrier’s CEO. The Gulf airlines are taking firm aim at the Asia Pacific region which is already affecting Asian carriers in some ways.

Garuda Indonesia remains the largest Asian carrier between the two regions; much of its capacity related to religious travel, with Cathay Pacific the second largest early in 2013, slipping to third place at the beginning of this year. Philippine Airlines has taken the number two ranking, largely driven by a demand for migrant workers. The Philippines has put pressure on long haul operations with new services between Manila to Dubai from Cebu Pacific, Philippine Airlines and PAL Express. With increasing saturation of the Philippines-Middle East market, and the addition of the Abu Dhabi to Hong Kong service from Air Seychelles (part owned by Etihad), Cathay Pacific is consolidating its network, recently announcing the end of its services to Abu Dhabi and Jeddah.

Garuda-Indonesia

Singapore Airlines which has always prided itself on its high service standards, faces competition not only on routes from Gulf carriers, but star rating too. Malaysia Airlines has been cutting costs and services for some time now, but reinstated its Kuala Lumpur to Dubai route in August of last year.

SQ

An increasing number of Middle Eastern-based airlines are eyeing long-haul, low-cost services as Saudi’s flynas (Nas Air) recently announced. The LCC intends on establishing connectivity to eight destinations in five countries, incorporating a 20×20 plan (20 million passengers by 2020).

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Vietnam Airlines are also facing competition from Middle Eastern carriers who have added more internationally connecting flights from Vietnam, and Saudi Arabian Airlines has just announced its intention to extend connectivity to over 200 destinations globally, including Japan, Vietnam and Taiwan.

Vietnam_Airlines_A330-200_VN-A376_MEL_2011-7-16

As some of these networks are reliant on seasonal religious festivals, and heavy one way traffic on routes attributed to employment, we can expect to see an adjustment in the way Asian carriers manage their Middle Eastern connections. Add the increasing expansion of UAE airlines who are fiercely building new networks globally and Asia’s enormous LCC growth, it is reasonable to expect that Asia-Pacific aviation is facing many more evolutions to come.