geoff dixon - Orient Aviation

to methods used to licence his long-haul,
low-cost carrier led to a four-month delay
of its launch. A first service to Gatwick has
to wait until at least next March and others
to European and U.S. cities will now come
that much later. Miller, the founding chief
executive of Dragonair 20 years ago, was
not happy.
Three new private airlines began business
in China itself. Okay Airlines, based in
Tianjin near Beijing, was the first to take
off, with Spring Airlines of Shanghai and
United Eagle Airlines of Chengdu following
quickly. Lower fares than those on offer at
the major airlines were promised, but fixed
landing fees and fuel price controls make
that more difficult to achieve in China than
elsewhere.
In fact, fuel prices ate heavily into
profits at Air China and Shanghai Airlines
and caused interim year losses at China
Southern Airlines, China Eastern Airlines
and Hainan Airlines, which was reported to
be heading for an initial public offering (IPO)
in Hong Kong.
Toshiyuki Shinmachi, the new man in
charge at Japan Airlines (JAL), who stepped
into a safety crisis that cost Isao Kaneko his
job as JAL chairman and chief executive –
following reprimands by Japan’s Ministry
of Land, Infrastructure and Transport – is
facing a major challenge. Katsuo Haneda
also quit as JAL International president and
other senior staff were demoted.
Shinmachi was not only tasked with
refurbishing JAL’s image, he also has
to see through the consolidation of the
complex merger with one-time rival, Japan
Air System (JAS), ensure operating costs
are cut in accordance with a tough midterm
plan and, for the first time, keep JAL
consistently profitable. All this in a time of
sky-high fuel prices.
Phuket Air was also the subject of safety
concerns. Its entire domestic operation was
grounded by Thailand’s Department of Civil
Singapore Airlines: talk in government circles of
an SIA – Qantas merger remains just that – talk
Aviation after a YS-11 overshot the runway
at Mae Sot, coming to rest in muddy ground
beyond. Earlier in the year, British inspectors
grounded one of its B747-200s at Gatwick
because of safety concerns and refused to
allow another to carry passengers.
Elsewhere, talk of a merger between
Singapore Airlines (SIA) and Qantas
Airways remained just that, talk, although
SIA chief executive, Chew Choon Seng, did
express surprise at comment from Australian
Prime Minister, John Howard, and Singapore
Transport Minister, Yeo Chow Tong, that
appeared to canvass the prospect of a union
between the rivals.
In Australia itself, Paul Stoddart, the
owner of leasing company, European
Aviation, and, incidentally, the former owner
of Formula 1 racing team Minardi (which he
recently sold), announced his plan to launch
an all-business class budget carrier, Ozjet
Airlines. His idea is to offer corporate-style
travel at economy rates, first using three
B737-200s kitted out with only 60 seats.
The aim is for a final fleet of 10 aircraft. Not
everyone was convinced he would succeed.
Ozjet commenced flying on November 29.
Meanwhile, Regional Express (Rex),
Australia’s largest independent regional
airline, claimed an overwhelming response
to its A$35 million (US$26 million) IPO. It
was formed three years ago when Kendell
and Hazelton Airlines joined forces,
following the collapse of Ansett.
And, in a final twist that is fascinating
aviation watchers, Australian logistics
group, Toll Holdings, launched a hostile
A$4.6 billion takeover bid for rival transport
firm Patrick Corp, in a move that could put
Virgin Blue back in the hands of Sir Richard
Branson’s Virgin Group.
Under Toll’s game plan, Patrick’s stake
in the airline would be reduced, giving the
British entrepreneur the chance to increase
his interest again. Branson is said to like the
idea.
Pilot shortages
put pressure
on training
The cockpit crew crisis debate
continued in 2005 with carriers in
the newer markets of China and
India the worst hit, but airlines across the
region are also facing problems. It was one
thing to hire or train a pilot, it seemed, quite
another to hang on to him or her as pressure
from fleet expansions and low-cost carrier
(LCCs) growth made their mark on the
market.
Better money on
offer from LCCs and
private start- ups
meant state-owned
carriers in China and
India were constantly
losing staff, or were
unable to find enough
pilots to match their
expansion plans.
Figures aired in
2005 were staggering.
India, it was said,
TRAINING
Malaysia Airlines:
increased pilots
salaries by 25%
would need 4,000 pilots in the next five years.
China must find up to 40,000 in the next two
decades. Figures from Airbus and Boeing
put the annual shortfall across the region at
nearly 6,000, and that was an underestimate,
observers said.
Some Chinese carriers are using western
recruitment companies to find expatriate
flyers who are paid at higher rates than
locals. India’s aviation secretary, Ajay
Prasad, held top-level meetings with airlines
to try to stamp out poaching.
India too is hiring foreigners. Reports
talked of schedule disruptions in both
countries due to crew shortages. Malaysian
Airlines (MAS), which has lost 80 pilots in
the last 18 months, tried the direct approach:
while denying any kind of crisis, it increased
salaries by 25%.
Training schools were doing brisk
business, with those owned by carriers often
looking to expand. That was especially so
in China where ab initio training is more
available domestically after restrictions on
general aviation were relaxed.
DECEMBER 2005-JANUARY 2006 ORIENT AVIATION 51