Special Guest Speaker Conrad Clifford Regional Vice ... Guest Speaker - Conrad Clifford...Special...

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Special Guest Speaker Conrad Clifford Regional Vice President Asia Pacific IATA

Transcript of Special Guest Speaker Conrad Clifford Regional Vice ... Guest Speaker - Conrad Clifford...Special...

Page 1: Special Guest Speaker Conrad Clifford Regional Vice ... Guest Speaker - Conrad Clifford...Special Guest Speaker Conrad Clifford Regional Vice President Asia Pacific IATA. Outlook for

Special Guest Speaker Conrad Clifford Regional Vice President Asia Pacific IATA

Page 2: Special Guest Speaker Conrad Clifford Regional Vice ... Guest Speaker - Conrad Clifford...Special Guest Speaker Conrad Clifford Regional Vice President Asia Pacific IATA. Outlook for

Outlook for the Airline Industry –

Growth or Gridlock in the Asia Pacific?

CONRAD CLIFFORD

Regional Vice President

IATA Asia Pacific

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Asia Pacific Airlines’ ROIC Lagging Europe and US

Source: IATA Economics using data from The Airline Analyst

0%

2%

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2010 2011 2012 2013 2014 2015 2016

EBIT

adj

uste

d fo

r op

erat

ing

leas

es a

s %

in

vest

ed c

apita

l

Return on invested capital

Industry average

North America

Europe

Asia Pacific

Latin AmericaMiddle East

Weighted Average Cost of Capital

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Growth has Returned to Air Cargo

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-40%

-30%

-20%

-10%

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-20%

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2001

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% year-on-year % year-on-year

Growth in industry FTKs Global PMI new export orders component (adv. 2 months)

Sources: IATA Economics, IATA Monthly Statistics, Markit

Implied PMI series if the index remains flat at its

February 2017 level over the coming months

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2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034

Global O-D passenger journeys (billion)

Constant policies scenario

Reflation/open borders scenario

Pick-up in Protectionism scenario

Source: IATA/Tourism Economics Air Passenger Forecasts, September 2016

Long-term Expansion Even in Gloomy Macro Scenario

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Security is the New Safety

The Rising Tide of Protectionism

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ASIA PACIFIC

Potential Growth and the Rise of LCCs

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2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035

US

China

UK

Japan

Spain

Germany

India

Italy

France

Indonesia

China

US

India

UK

Indonesia

Japan

Spain

Germany

Brazil

Turkey

Source: IATA/Tourism Economics Air Passenger Forecasts, September 2016

Significant Change in Top-10 Markets over Next 20 Years

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Source: IATA Economics

Change in LCC Penetration, 2005 - 2016

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Airline Model Spectrum

Low Cost Carriers Full Service Carriers

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ASIA PACIFIC

What’s Holding It Back?

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INFRASTRUCTURE - a dire situation

PEK Beijing Capital 567,759 1.9% 2019 83.7 2.2% FULL

PVG Shanghai 371,190 2.6% 2021 47.2 5.1% 2018

HKG Hong Kong 382,782 5.7% 2016 59.6 6.3% FULL

BOM Mumbai 269,394 4.4% 2020 32.0 6.4% 2018

DEL Delhi 309,074 1.3% 2022 36.7 7.3% 2021

CGK Jakarta 398,985 4.9% 2021 60.1 4.1% FULL

NRT Narita 223,377 6.1% 2029 35.3 7.5% 2022

KUL Kuala Lumpur 326,678 15.3% 2023 47.5 19.1% 2022

MNL Manila 271,508 -0.6% 2019 32.9 3.1% 2015

SIN Singapore 346,796 6.0% 2018 53.7 5.0% 2018

ICN Incheon 273,866 6.8% 2022 41.7 6.4% 2015

BKK Bangkok 301,747 -4.8% 2023 51.4 -3.1% FULL

DXB Dubai 369,953 7.5% 2019 66.4 15.2% 2016

HAN Hanoi 89,835 6.6% NO DATA 12.8 13.1% FULL

IATA

Code Name

RUNWAYS

2013

Growth

Rate

Capacity

limit

reached

2013 Aircraft

Movements

2013

Passengers

in Millions

2013

Growth

Rate

TERMINAL

Capacity

limit

reached

Source: IATA/ACI

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Source: Intervistas

Infrastructure essential to

unlocking the

‘Value of Aviation’

within the period of 2014-2035

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REGULATIONS

ASEAN Single Aviation Market Visa Restrictions Aviation Security Fees and Charges

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GROWTH OR GRIDLOCK?

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THANK YOU