NICHOLAS IONIDES SINGAPORE
Asian carriers have started to cut services and slash spending as a result of the global industry downturn.
The region's airlines say forward bookings have fallen since the 11 September terrorist attacks, particularly for flights to the USA. But most are predicting the region will not suffer nearly as badly as North America and Europe in the short- to medium-term.
Many of the region's carriers remain cautiously optimistic, describing service reductions as temporary. Some are even launching new services within Asia to make up for long-haul cuts.
Singapore Airlines (SIA) has been the first to go public with cuts, imposing a hiring freeze and possible retrenchments. Services to Macau, Karachi and Lahore in Pakistan, and Kota Kinabalu and Kuching in Malaysia have been suspended while frequencies have been reduced on five more routes. SIA and its subsidiaries have also cut management salaries by 7-15%, while SIA Cargo is dropping freighter services to Macau, Melbourne and Perth in Australia, and Penang in Malaysia. Frequency reductions are being made on other routes, but new freighter services are being launched to Dallas and Munich.
Malaysia Airlines expects to ground eight Boeing 747-400s and 777-200s next year after sweeping route cuts are implemented. It says that within six months it will have scrapped loss-making services to 12 international destinations, in addition to temporarily suspending flights to New York. Frequency cuts are being made on other international routes, but some intra-Asia flights will see service upgrades.
Japan Airlines, one of the Asian carriers most exposed on North American service, is reducing transpacific flights by 24%, temporarily suspending services on three US routes and cutting frequencies on several others. All Nippon Airways began its cuts last month by reducing frequencies to Guam. It later expanded reductions by saying Tokyo-Chicago and Tokyo Washington routes would be consolidated to operate on Tokyo-Chicago-Washington routings. Nagoya-Honolulu services will be suspended, but Tokyo to Seoul and Dalian flights increased.
Korean Air, already suffering before the 11 September attacks, has suspended operations to six destinations and reduced services on four other long-haul international routes. It is compensating, however, by launching new services to China, Japan and Vietnam.
South Korean rival Asiana Airlines is cutting 360 jobs (5% of its workforce) and has suspended services on four domestic routes. It will return a wet-leased freighter and carry out other cost-cutting measures after a wider review of operations is finalised. It has also reduced frequencies to Los Angeles.
Philippine Airlines has deferred plans to acquire additional Boeing 747-400s for transpacific services, while Cambodia's Royal Air Cambodge has ceased operating and private Thai carrier PB Air has dropped plans to launch Phuket-Stockholm services. Thai Airways International has reduced Colombo services and suspended Lahore and Karachi flights, but is expanding flight frequencies within Asia and to destinations in Europe, while launching new flights to Chengdu and Mumbai.
Cathay Pacific Airways is carrying out a "top-to-bottom" review of operations, that may include job cuts. A hiring freeze for ground staff and cabin crew is in force, while pilot recruitment is being "phased out". Cathay is also looking to defer or cancel capital projects and purchases. It has dropped services to Karachi and temporarily cut around 4% of its international schedule, but is launching new services to Sapporo in Japan.
China Southern Airlines suspended flights between Beijing and Sharjah in the United Arab Emirates, citing security reasons, while Air China suspended services to Kuwait via Karachi. China Eastern Airlines has reduced frequencies between Shanghai and Los Angeles.
In Taiwan, EVA Airways has slashed frequencies to the USA and South-East Asia, and is planning job cuts. Services to Penang have been dropped as part of a temporary downsizing programme that will see 17 weekly flights cut.
Qantas Airways is reducing frequencies to Los Angeles and warning unions to prepare for job cuts and new labour agreements. A productivity review is under way, while executive positions are to be trimmed by around 10%.
Source: Airline Business
