MARINA DEL RAY, Calif. - The high-end airline alliance oneworld celebrated its 10th anniversary last year. This year, it's accelerating efforts to further integrate its 11 members on the operational side. Those changes are coming both alliance-wide and in bilateral deals between member airlines hoping to get through tough economic times by joining forces.
Indeed, deals - pending and fondly hoped-for - dominated talk by airline CEOS at yesterday's conference here on the breezy, sunny seaward edge of Los Angeles.
One item that got everyone's attention was the ever-closer cooperation between American Airlines and Japan Airlines. JAL is restructuring in bankruptcy, and is expected to emerge as a much smaller, leaner operation. That has focused the minds of executives at American, who helped convince JAL to stay with oneworld after rival alliance SkyTeam wooed the Japanese carrier in hopes that it would peel away from oneworld and join SkyTeam. Didn't happen.
JAL's president, Masaru Onishi, attended the conference. He didn't confirm reports in Japan's Nikkei business daily that JAL will cut up to 16,500 jobs. Nor did he comment on a report in U.S.-based Business Week that JAL has proposed paring pension payments to retirees by as much as 50 percent.
Onishi did join American Airlines CEO Gerard Arpey - who chairs oneworld's directors - in touting plans for joint trans-Pacific cooperation.
Japanese media have reported that JAL's major creditors are demanding huge international cutbacks. If a big route reduction actually happens, JAL will become more of a short-haul, Japan-focused airline. That would open up international opprtunities for its Japanese rival, All Nippon Airways, a member of Star Alliance. It could also mean American greatly ramps up its own trans-Pacific service.
JAL spokeswoman Yap Sze Hunn told me at the conference that the big decisions on JAL's restructuring are expected to be made this June or July.
I asked Arpey if American, in essence, wants to take over any abandoned JAL international routes. Referring to applications to the U.S. and Japanese governments for antitrust immunity, Arpey replied that "Until we get immunity, we are not allowed to talk to JAL about routes.''
But, Arpey added, should antitrust protection be granted, the two carriers will launch a number of joint ventures that could reshape trans-Pacific air travel, especially on well-traveled routes between Asia and North America. He didn't spell out what those ventures would be.
Already, Arpey said, AA and JAL have 11 employee teams working on matters of mutual interest. He said AA is, for example, sharing information from its FuelSmart program - i.e., how to cut back on use of costly and polluting jet fuel - with JAL.
For now, JAL and AA are funneling passengers onto each other's flights, relocating operations in major airports so that transfers between airlines become faster and easier for travelers, and expanding access to AA airport lounges for JAL's passengers.
Arpey said that AA has applied to launch service between Chicago O'Hare International Airport and Haneda International Airport, the convenient in-city airport in Tokyo. That possibility was opened up by an Open Skies pact signed early this year by the U.S. and Japan. "If we are awarded those routes, we'll start them right away,'' Arpey told me.
British Airways and Spain's Iberia, both members of oneworld - the style-minded alliance likes to lower-case its name - announced Thursday that they plan to conclude an outright merger late this year, subject to regulatory approval. Each airline will keep its name, livery and identity, acccording to BA's CEO, Willie Walsh, who attended the meeting here.
While talk was dominated by the courtship dance between JAL and American - a matter of intense preoccupation to the big contingent of Japanese reporters who winged across the Pacific to cover this meeting - other matters of interest to travel-biz types came up, too.
I chatted on the sidelines with Cathay Pacific Airways CEO Tony Tyler. He told me that the Hong Kong carrier's lucrative premium business-class traffic is finally beginning to recover after a frightening freefall brought on by the Great Recession.
"It started to rise late last year, and it has continued into this year,'' Tyler said. "It seems the bankers have started to travel to China again.''
When inquisitive journos asked American's Arpey about what AA will do if rivals United Airlines and US Airways merge - as many media reports say they want to do - he declined "to speculate about something that may or may not happen.''
Arpey did allow that "There will inevitably be consolidation around the world in the airline industry.'' But he downplayed the signifcance of mergers, as opposed to airline alliances and the kind of joint venture deals that oneworld partners are crafting.
"I don't necessarily think that consolidation is the answer to all of the economic challenges that the industry faces,'' Arpey attested. "I don't think that is the silver bullet for solving some of the industry's financial challenges.''
Showing posts with label Tony Tyler. Show all posts
Showing posts with label Tony Tyler. Show all posts
Friday, April 9, 2010
Friday, October 2, 2009
Tony Tyler's View from 37000 Feet
Writing travel stories and covering aviation gives me many chances to meet travel-biz executives, some of whom are high-flying visionaries and some of whom have trouble getting their ketchup to find their fries.
Tony Tyler, the CEO of Hong Kong's Cathay Pacific Airways, is one of the good ones. I've interviewed him twice, once in San Francisco and once in his office-with-a-view in Cathay Pacific City, the airline's gleaming headquarters at Hong Kong International Airport. Both times he had interesting and insightful things to say, not just about his airline but about airlines and travel.
I flew last month around East Asia on Cathay and its affiliated carrier Dragonair. I didn't meet up with Tyler, but I did come across a speech he made to the annual Asian Aerospace conference, held this year in Hong Kong. If the agenda he sketched in that speech is followed in the real world, it will change the way we fly by reducing pollution from the world's jetliners and helping to harmonize the crazy-quilt of national and regional regulations by replacing them with a global set of standards. Guilt-free flying? Could happen.
Like everyone in travel, Tyler has a dismal take on the economy. "Hand on heart, I can say this is one of the most challenging times we have ever faced - and I know we are not alone ... I have been in the business for 30 years and seen many highs and lows, but the past year and a half is as bad as it's ever been.''
More to the point, what can be done about it? What has Cathay done about it?
The airline - founded in Hong Kong by two World War II vets in 1946 and now one of the major players in Asia - has reduced its number of flights and done everything it can to hedge fuel prices. Most airlines have done that. What most airlines have not done is keep their staff intact during the downturn. Cathay has done that, cutting salaries and inducing staffers to take unpaid leave, but avoiding morale-busting staff layoffs.
Happily, Cathay has - so far, at least - also avoided cutting back on the premium customer service that make it one of the planet's Tiffany carriers. Tyler pledges to keep it that way, even if the Great Recession changes the way people travel for years to come, as it may.
"One thing I do know is that Cathay Pacific will remain a premium carrier,'' he said. "High-yield business travel might not come back in the same way as before, but there will still be a place for airlines that differentiate in terms of the level of service they provide ... This is especially true in Asia, where people still expect some pampering and special attention on flights that, on average, are longer than those in Europe or in the U.S.''
More broadly, Tyler - this year's chairman of the International Air Transport Association, the global trade group for airlines - is promoting a badly needed 'green' agenda. In December 2007, Cathay followed the lead of British Airways, SAS and several North American carriers by introducing a voluntary carbon-offset program for passengers.
Now, Tyler and the airline industry is looking at what may come out of the climate-change summit scheduled for December in Copenhagen - and trying to modify or pre-empt regulation of airplane emissions. As Tyler correctly noted in his Hong Kong speech, IATA has adopted the ambitious goal of getting its 200-plus members to be carbon-neutral on their flights
"Airlines are the first global industry to make such a commitment, and this will require ongoing investment in fleet renewal, new airframes and engines, infrastructure, operations, biofuels and offset mechanisms such as emissions trading,'' Tyler says.
Of course, getting aviation operations that match high-flying rhetoric is complicated and time-consuming. The world's airlines are not there yet. And the British-born Tyler, like all corporate executives, has a duty to make a profit for shareholders that can be at odds with blue-sky goals. But, Tyler's lofty view from 37,000 feet comes closer to matching the realities on the ground than those of many of his compatriots. Aviation, and travel generally, need more like him.
Tony Tyler, the CEO of Hong Kong's Cathay Pacific Airways, is one of the good ones. I've interviewed him twice, once in San Francisco and once in his office-with-a-view in Cathay Pacific City, the airline's gleaming headquarters at Hong Kong International Airport. Both times he had interesting and insightful things to say, not just about his airline but about airlines and travel.
I flew last month around East Asia on Cathay and its affiliated carrier Dragonair. I didn't meet up with Tyler, but I did come across a speech he made to the annual Asian Aerospace conference, held this year in Hong Kong. If the agenda he sketched in that speech is followed in the real world, it will change the way we fly by reducing pollution from the world's jetliners and helping to harmonize the crazy-quilt of national and regional regulations by replacing them with a global set of standards. Guilt-free flying? Could happen.
Like everyone in travel, Tyler has a dismal take on the economy. "Hand on heart, I can say this is one of the most challenging times we have ever faced - and I know we are not alone ... I have been in the business for 30 years and seen many highs and lows, but the past year and a half is as bad as it's ever been.''
More to the point, what can be done about it? What has Cathay done about it?
The airline - founded in Hong Kong by two World War II vets in 1946 and now one of the major players in Asia - has reduced its number of flights and done everything it can to hedge fuel prices. Most airlines have done that. What most airlines have not done is keep their staff intact during the downturn. Cathay has done that, cutting salaries and inducing staffers to take unpaid leave, but avoiding morale-busting staff layoffs.
Happily, Cathay has - so far, at least - also avoided cutting back on the premium customer service that make it one of the planet's Tiffany carriers. Tyler pledges to keep it that way, even if the Great Recession changes the way people travel for years to come, as it may.
"One thing I do know is that Cathay Pacific will remain a premium carrier,'' he said. "High-yield business travel might not come back in the same way as before, but there will still be a place for airlines that differentiate in terms of the level of service they provide ... This is especially true in Asia, where people still expect some pampering and special attention on flights that, on average, are longer than those in Europe or in the U.S.''
More broadly, Tyler - this year's chairman of the International Air Transport Association, the global trade group for airlines - is promoting a badly needed 'green' agenda. In December 2007, Cathay followed the lead of British Airways, SAS and several North American carriers by introducing a voluntary carbon-offset program for passengers.
Now, Tyler and the airline industry is looking at what may come out of the climate-change summit scheduled for December in Copenhagen - and trying to modify or pre-empt regulation of airplane emissions. As Tyler correctly noted in his Hong Kong speech, IATA has adopted the ambitious goal of getting its 200-plus members to be carbon-neutral on their flights
"Airlines are the first global industry to make such a commitment, and this will require ongoing investment in fleet renewal, new airframes and engines, infrastructure, operations, biofuels and offset mechanisms such as emissions trading,'' Tyler says.
Of course, getting aviation operations that match high-flying rhetoric is complicated and time-consuming. The world's airlines are not there yet. And the British-born Tyler, like all corporate executives, has a duty to make a profit for shareholders that can be at odds with blue-sky goals. But, Tyler's lofty view from 37,000 feet comes closer to matching the realities on the ground than those of many of his compatriots. Aviation, and travel generally, need more like him.
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