North Asia: New players, new routes, new opportunities

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Kim JungShik (CEO of Eastar Jet), Andrew Cowen (CEO of HK Express), Stephen Wang (President of Spring Airlines) and Patrick Murphy (Executive Advisor of Peach Aviation) gathered at Aviation Festival Asia 2016 to discuss their biggest growth challenges and opportunities. Here’s a summary of what was discussed.

All the LCCs agreed that infrastructure remains the number one challenge, especially in North Asia. Getting extra slots is nearly impossible and if they are available they come at a premium cost. LCCs need fewer resources and services and also use their slots more efficiently, however, this is not recognised and appreciated by most airports. There are currently no incentives or special rates provided to LCCs. In fact, as newcomers in the market, they get the least favourable spaces at the airports and still have to pay a premium cost.

As infrastructure will continue to cap the growth of LCCs, they are looking at alternative ways to expand their networks and provide their customers with wider connection and destination choices. HK Express formed the World’s First Low-Cost Carrier Alliance currently comprising four LCCs: HK Express, Lucky Air, Urumqi Air and West Air. “With the launch of the first LCC alliance in the world, we are entering into a new era of travel that speaks to what travellers really want: flexible and affordable routes that are also safe and secure,” said Andrew Cowen. “Thanks to the cooperation from the innovative low-fare airlines, we are able to connect travellers from Asia and Greater China to an ever-increasing network of cities.”

The staff shortage is a huge issue not only for LCCs but for the whole aviation industry. Executives share that while remuneration is very important, there are other ways to attract and retain talents. Performance-based pay, job rotation, travel benefits, training and delegation are amongst few factors playing an important role in employee retention. LCCs also reveal that being approachable and accessible is very important. The CEOs of HK express and Peach Airlines sit in the same office with all the other staff to ensure continuous communication.

It’s exciting to imagine what’s in store for North Asian LCCs over the coming year. Clearly there is much opportunity, but there are also roadblocks we need to overcome to enable them to fulfill their full potential. Join us at Aviation Festival Asia 2017 in Singapore next February 21-22 and find out more.

photo credit: wilco737

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