As western carriers continue their retreat from Asia, the region's airlines are starting to fill in some of the gaps. This capacity redeployment by the foreign majors has given Asian alliances a welcome boost.

New schedules effective 25 October show a continuing shift of non-Asian capacity out of the region. British Airways is cutting weekly Jakarta flights from six to two and suspending all London-Osaka flights. BA has withdrawn over the past six months from Nagoya, South Korea and Sri Lanka.

Qantas is also pulling out of Osaka and Fukuoka, following an August cutback in its Tokyo flights, and suspending three weekly flights to Kuala Lumpur. Earlier it cut back in Thailand and suspended services to Vietnam and South Korea.

US carriers are maintaining their presence in Asia, especially at the critical Tokyo/ Narita hub, but have quietly deferred or reduced growth plans in the region. Continental Micronesia, for instance, is replacing Boeing 747s with smaller McDonnell Douglas DC-10s on its Guam-based Asian network.

The withdrawals have led to some opportunistic expansion. Qantas boosted its Manila flights after Philippine Airlines dropped all services to Australia. The grounding of Indonesia's Sempati Airlines and cutbacks at Merpati Nusantara also prompted Qantas to add flights to Bali.

Despite Qantas executive general manager commercial Geoff Dixon's accusation that Asian airlines are dumping capacity, recent plans for new flights appear to be in response to withdrawals. When Qantas was planning to cut its three weekly Osaka flights, Japan Airlines was adding four per week from Osaka to Australia. When BA suspends its three weekly London-Osaka flights at the end of October, JAL will add one. Singapore Airlines has also added capacity in Asia as other carriers have pulled back.

Carriers cutting back typically substitute code-shares for their own flights and Asia's turmoil could lead to more strategic alliances. Cathay Pacific, Thai International Airways and Philippine Airlines have all been the subject of recent alliance talks. Singapore Airlines has agreed to take an equity stake in China Airlines and Taiwan's EVA Airways seeks European airline links.

New airports in Hong Kong and Kuala Lumpur have given non-Asian carriers the chance to expand their Asian networks. But traffic falls make alliances seem more attractive. KLM Royal Dutch Airlines and Malaysia Airlines have started code-sharing between Kuala Lumpur and Amsterdam while Swissair now has route-specific pacts with JAL, Cathay and Air China. Air France is talking of an Asian alliance network centred on its hub at Hong Kong/Chek Lap Kok.

Source: Airline Business