Strategic Opportunities for Vietnam Aviation

Hanoi – The International Air Transport Association (IATA) called on the Vietnamese government to work with the air transport sector to strengthen the country’s economy through global air connectivity. IATA identified three broad strategic areas to focus on:  infrastructure, passenger experience and cargo.

“Vietnam is a dynamic and rapidly growing aviation market. The successful development of aviation will pay big dividends to the Vietnamese economy. It must be treated as a strategic asset and handled correctly,” said Tony Tyler, IATA’s Director General and CEO in his keynote address at the Vietnam Aviation Day organized by IATA and Vietnam Airlines. Aviation contributes $6 billion to Vietnam’s GDP and supports over 230,000 jobs. Between 2008 and 2013, Vietnam’s passenger traffic grew by 96%.

Infrastructure

Infrastructure is a critical component of the air transport sector which needs improvement. Vietnam ranks 82nd in the Infrastructure Index of the World Economic Forum’s Global Competitiveness Report. Among the ten ASEAN states, Vietnam is ranked sixth. Vietnam is addressing these low rankings with significant investments. It has announced an aviation master plan to have 26 airports by 2020. Expansion programs are underway at Hanoi and Ho Chi Minh airports, with the new Long Thanh International Airport to be ready by 2020.

While encouraged by the positive steps taken to improve Vietnam’s infrastructure, IATA urged careful planning and industry consultation leading to a well-thought-out regulatory structure in advance of any change to the current structure and ownership of Vietnam’s airports. Vietnam has indicated plans to open its airports to foreign investment and management, and to privatize the Airports Corporation of Vietnam. “While airport privatization can provide access to the capital needed for infrastructure programs, we have seen enough spectacular examples of unintended negative consequences to urge caution. The most common being unjustified increases in charges or under-investment in the CAPEX plan as the private operator tries to squeeze out profit,” said Tyler.

“To balance the market power of privatized airports, Vietnam needs to establish an effective independent economic regulator that is in line with well-established international norms. That should bring about fair charging schemes aligned with International Civil Aviation Organization (ICAO) policies. Lower charges will also improve the viability of routes and allow Vietnam to reap the benefits from enhanced connectivity and increased traffic,” said Tyler. ICAO’s policies on charges are based on the principles of non-discrimination, cost-relatedness, transparency, and consultation with users.

Passenger Experience

Tyler identified the implementation of IATA’s Fast Travel program and the easing of visa requirements to improve the passenger experience in Vietnam.

Fast Travel: Tyler encouraged Vietnam to make it a priority to implement the six Fast Travel initiatives covering check-in, self-tagging of baggage, document check, flight rebooking, self-boarding and bag recovery. “Passengers have told us through the IATA Global Passenger Survey that they want to be able to do more things themselves. As Vietnam develops its airport infrastructure, it has the opportunity to build them around the self-service expectations of travelers,” said Tyler. He cited Doha’s Hamad International Airport, which opened this year with five of the six Fast Travel initiatives.

Easing Visa Requirements: Tyler urged a review of the visa requirements to enter Vietnam. “Tourism is important to Vietnam. Every tourist that decides to have a holiday in a neighboring country because of Vietnam’s visa process is a lost economic opportunity. Easing visa requirements can boost tourism,” said Tyler.

Cargo

While air freight accounts for a very small amount of Vietnam’s trade by volume, it represents 25% of Vietnam’s trade by value, or $29 billion. E-freight will help to improve the efficiency of Vietnam’s air cargo industry.

“A key step to implementing e-freight is the adoption of the e-Air Waybill (e-AWB). While Vietnam Airlines has been able to use e-AWB for domestic freight, it is unable to do so internationally as Vietnam has yet to ratify the Montreal Convention 99 (MC99). I urge Vietnam to ratify MC99 quickly so that greater efficiencies can be achieved in Vietnam’s air cargo sector,” said Tyler. MC99 provides the legal framework for the use of electronic document of carriage, paving the way for freight forwarders and airlines to use the e-AWB.

Ebola

In his keynote remarks at the Aviation Day, Tyler also addressed the concerns regarding the potential spread of Ebola by air.

“Ebola is a terrible disease.  But it is very different from SARS, which had a devastating impact on aviation in Asia. The World Health Organization (WHO) has advised that the risk of transmission of Ebola during air travel or even when visiting an affected country is low. Having dealt with several outbreaks of communicable diseases over the years, the air transport industry is prepared,” said Tyler. Guidance materials have been developed by WHO, ICAO and IATA. IATA has specific guidance materials on communicable diseases available for maintenance crew, cabin crew, cleaning crew, and passenger agents.

“IATA is working closely with WHO and ICAO in a task force to ensure effective coordination of efforts in areas affecting civil aviation. WHO is the global expert. We will continue to follow WHO’s advice and encourage governments to do so as well,” said Tyler.

Passenger Innovation Awards 2014

Passenger Innovation Awards 2014

The Passenger Innovation Awards is an initiative that aims to ignite new ideas in the passenger world. The ideas should meet at least one of the following objectives:

Improve passenger experience - anywhere in the process from shopping to travel, including ground experience Reduce or drive improvements to simplify existing processes or decrease costs Create an innovative product or service that falls under the Simplifying the Business (StB) scope and at least one of the five StB goals (pdf). Visit the Passenger Innovation Award 2014 page.

World Passenger Symposium 2014

The World Passenger Symposium 2014 will focus on how industry collaboration can trigger innovation and drive value through innovation for the benefit of customers. It will cover the transformation currently taking place in the industry in the areas of Distribution, Customer Experience and Airport Design.

Event highlights

• New Feature: CIO & IT Executives ForumThis forum, themed “Digital Business for the Airline Chief Information Officer (CIO)” will bring together Airline CIOs and senior IT executives to present the current aviation technology trends.  The session will provide an exclusive environment to meet your CIO counterparts from other airlines to discuss and learn about technologies relevant to the airline industry .

This forum will be jam packed with hot topics:

• Digital Business in Aviation
• Innovation Product Development
• How to leverage Big Data
• How to operate in a high volume low margin business
• Paperless Aircraft Operations 
• CIO versus Chief Marketing Officer, and the Chief  Digital Officer?

A Revolution in Distribution?

From central reservation to global distribution systems; from airline websites to online travel agents, travel metasearch and business travel agents, distribution has never stopped being a key topic for airlines and their partners. Is New Distribution Capability (NDC) the next frontier for airline distribution? Will it bring radical changes to the distribution to end-consumer or is it a natural evolution for an industry that is lagging behind in terms of product retailing?

The Millennial CustomerLearn about the “millennials" - the next generation of travellers. How will they change the game? Learn about the multiple expectations throughout the journey and how empowering customers  will allow them to dynamically design their own experience. Will the customer interact in real time with their airlines and airports? What role will social media play in 25 years?

Airport 2025
Listen to discussions on how we can create a better experience while at the same time assuring security and border control. Learn how airport design anticipates infrastructure changes in new airport development but also in refurbishing existing airports.

Autopsy reveals Kenya Airways staff found dead in Kileleshwa was strangled

A Kenya Airways employee who was found dead in a car in Kileleshwa, Nairobi was strangled to death, according to a postmortem report.

The chief government pathologist Dr Johansen Oduor said the only injuries found on the late Jacquelyne Wairimu Muturi were on the neck.

"She was strangled using bare hands," he said.

Officers on patrol found the body of Ms Muturi at the back seat of a vehicle along Mamlaka Road Tuesday morning.

Kilimani OCPD Peter Kattam said that they had launched investigations into the death.

“We suspect the intention was to murder her since nothing was stolen from her,” he said.

The officers saw the vehicle parked and on checking found the body that had injuries on the neck.

The deceased, who lived in South B estate, had left Kileleshwa where she had gone to visit her sister.

Meanwhile Dr Oduor ruled out any foul play in the death of an American who also died in Kileleshwa on Tuesday night.

He said the postmortem conducted on the body of Mr Andrew Johnson 52, had shown that he died of heart attack.

Mr Johnson was in the country to visit her daughter, who is the country director of Farm Africa, when he collapsed and was later pronounced dead by doctors.

Tullow announces new Kenya oil discovery

Oil Company on Thursday announced a discovery of oil at the Etom 1 exploration well that it said extended the already proven South Lokichar basin “significantly northwards”.

Tullow said in a statement that the well, drilled 6.5 kilometres north of the previous Agete-1 discovery, had an estimated 10 metres of net oil pay.

The discovery is the northernmost to date in the South Lokichar basin, Tullow said.

It said that following the success of the South Lokichar basin, the site would be extended to cover a further 247 square kilometres in this northern area.

APPRAISAL WELLS

The company said appraisal wells in the Ngamia 3 field encountered 150 metres of net oil pay in both the Auwerwer and Lokone reservoirs, while the one at Amosing 1 encountered up to 30 metres net oil pay.

“Continued success in appraisal of the Ngamia and Amosing fields reinforces our belief that the South Lokichar basin holds very considerable potential which we hope to replicate in additional basins,“ said Angus McCoss, Tullow’s exploration director.

He said opening tests in the neighbouring Kerio basin would start in September.

“The next basin-opening test will be in the neighbouring Kerio Basin, with the Kodos-1 well expected to spud in early September," said Mr McCoss.

In the oil and gas industry, "net oil pay" is the thickness of a rock that can deliver hydrocarbons to the well bore at a profitable rate.

Porter Aviation Puts Billy Bishop Airport Terminal on Auction Block

Porter Aviation Holdings Inc. has put the passenger terminal attached to Billy Bishop Toronto City Airport on the auction block, according to people familiar with the matter.

The sale is expected to value the terminal at more than $500 million, the people said. Porter Aviation's lease on the terminal expires in 2033, but it is being offered to buyers with the option for renewal, the people said.

Porter Aviation is working with RBC Capital Markets and Barclays Capital on the sale process, the people said. Porter Aviation will use the proceeds from the sale to grow its airline business, one of the people said. Porter Airlines currently offers flights to cities including Toronto, Montreal, Ottawa, New York, Chicago, Boston and Washington.

Potential buyers include infrastructure-focused private-equity firms and pension funds, which like airport investments due to the stable nature of their returns.

Aviation commission should not protect Malaysia Airlines, says Umno MP

The proposed aviation commission should not solely favour cash-strapped Malaysia Airlines (MAS) as the national carrier undergoes a massive revamp to turn itself around, said an Umno lawmaker.

Pulai MP Datuk Nur Jazlan Mohamed (pic) said the commission, which was proposed by state sovereign fund Khazanah Nasional Berhad as an economic regulator under a plan to revive the national airline, should not disrupt the operations of other players in Malaysia's aviation industry.

"I hope the commission is not used solely in favour of MAS to the detriment of other players. The commission must be for the betterment of the aviation industry and for the benefit of the people.

- See more at: http://www.themalaysianinsider.com/malaysia/article/aviation-commission-should-not-protect-malaysia-airlines-says-umno-mp#sthash.NOAzaEnj.dpuf

"The commission should also act in the interest of the nation by improving more routes and connectivity between domestic and international markets to make it accessible for all Malaysians," he told The Malaysian Insider.

Khazanah unveiled a 12-point comprehensive exercise for MAS yesterday to return the airline into profitability, the earliest by 2017.

Under the plan, Khazanah will invest up to RM6 billion on a staggered and conditional basis over three years.

It will also see the setting up of a new company to house the carrier, rationalise routes, renegotiate current contracts, cut 30% of the 20,000-strong workforce and move its operations from Subang to Kuala Lumpur International Airport.

Nur Jazlan said the plan seemed like a financial rather than business restructuring, with the main aim of cleaning up MAS's balance sheet.

The parliament's Public Accounts Committee (PAC) chairman said there should be more details to address the airline's business restructuring, given that MAS is facing intense competition not only from global airlines but from other domestic players as well.

"How is MAS going to compete with other premium airlines and low-cost carriers with the Open Skies Policy and a highly-competitive globalised environment?

"MAS is no longer the main player in the domestic market, so how are they going to up their presence to fit into the international network?" he asked.

He pointed out the Asian market is suffering from over capacity and competition is fierce, and as such there are questions on how MAS can grow given these challenges.

"These are more business issues that needed more clarity," he said, adding that the new management hired to turnaround the carrier must be experienced in restructing airlines as a business.

MAS is to be taken private by Khazanah, which owns over 69% of the carrier.

Earlier in August, it had announced its plan to buy out shares it does not own at 27 sen for each MAS share, amounting to nearly RM1.4 billion, to take the troubled airline private.

A total of RM1.6 billion will be spent on restructuring and retrenchment costs, while RM3 billion will be injected progressively into the new company.

CEO Ahmad Jauhari Yahya will continue to lead until July 2015 when the new company comes into force, while Khazanah will announce his successor before the end of this year.

If everything goes as planned, MAS will be relisted within three to five years, or between the end of 2017 and 2019, and Khazanah will embark on a sell-down or partial sell down of its stake.

MAS announced its second quarter results yesterday which recorded a net loss of RM307 million, which brings the total loss to RM750 million for the first six months of this year.

The carrier had undergone three restructuring exercises since 2007 which had failed to yield any results due to a bloated workforce, changing market demand, stiff competition and high overhead costs.

MAS troubles was further affected by two major aviation disasters this year.

Flight MH370 from Kuala Lumpur to Beijing vanished in March with 239 people on board, while flight MH17 from Amsterdam was shot down over Ukrainian air space on July 17, killing all 298 people on board. – August 30, 2014.

- See more at: http://www.themalaysianinsider.com/malaysia/article/aviation-commission-should-not-protect-malaysia-airlines-says-umno-mp#sthash.NOAzaEnj.dpuf