asia and digital will transform aviation

Asia and the digital revolution are two of the global forces that will have a long term impact on aviation, according to CEO of Qantas group, Alan Joyce.

Speaking at the CAPA Australia Aviation Summit in Brisbane last week, he said that although the US remains Qantas’ largest market, Asia “which amazes me” saw a A$300m EBIT improvement last year, its highest in the network.

“While US and Europe are important, Asia has bigger growth potential.”

Due to announce expected stellar results end of this month, a clearly-confident Joyce said Jetstar, its low cost subsidiary, was well-positioned to compete in the region, calling the newly-formed Value Alliance, a grouping comprising its competitors, Tigerair and Scoot, “playing catch-up with the scale of AirAsia and Jetstar”.

“We are way ahead in the markets the (member) airlines operate in and we can compete against them and in many markets, we outperform them.”

The impact of Asia, he said, would be huge on aviation, an industry which has to make long term decisions especially in fleet orders.

He listed these statistics. By 2009, Asia had already become the largest aviation market in the world. By 2025, 20 of the world’s richest 50 cities will be in Asia. By 2030, 35% of all consumer spending will be from China and India combined. And by 2034, Asia’s aviation market will be bigger than Europe and America put together.

Qantas’ decision to restructure its network “so that it wasn’t on the way to Europe” and its decision to invest in premium products and services was paying off.

“Premium brands will be extremely important in this region,” he said, echoing Jetstar Group’s CEO Jayne Hrdlicka’s comment made the day before that the future would be owned by brands people know and trust.

“The number of new passengers coming in everyday, looking for their entry into the market, will be driven by fares and brands providing for the next generation of travelers in a way that works best for them,” she said.

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