Carriers should right-size fleets: jet manufacturers

CARRIERS need to consider right-sizing their fleets to ply regional routes as major aviation hubs in Asia struggle with infrastructure constraints amid the march towards Asean open skies, jet manufacturers said.

Smaller jets translate to a quicker turn-around time, which would help airports maximise infrastructure and cope with congestion, while enabling airlines to offer passengers more choice through greater frequencies, attendees at the CAPA Airline Fleet & Finance Summit Asia 2014 heard yesterday.

"In the current model, there needs to be a good dose of right-sizing," said Embraer's vice-president (Asia-Pacific) of commercial aviation, Mark Dunnachie, responding to a question on whether carriers in the region have over-ordered planes on expectations that travel demand would continue to grow. "Carriers need to use the right tool for the job."

Mr Dunnachie also disagreed with an oft-raised point that a fleet powered by a single plane-maker or similar aircraft type keeps maintenance costs down, saying that smaller jets were more economical to operate per trip. "It's not smart flying empty seats," he added.

Asean is working towards an open skies agreement - which would deliver unfettered third, fourth and fifth freedoms for the countries - with the aim of liberalisation by end-2015.

For example, in the case of third and fourth freedoms, a Singapore-based carrier would be able to fly from here to another city in Asean without restrictions on the number of flights.

In the case of fifth freedoms, the airline would be allowed to fly from here to another Asean city in a second country and onward to a third city in a third Asean country.

The open skies development has already started to create new opportunities for new airports and new carriers like Malaysia's Firefly, which uses ATR aircraft to fly to Singapore, noted Christophe Potocki, general manager of sales (Asean) for turboprop maker ATR.

But some airports are already facing infrastructure constraints as an emerging middle class bolsters travel demand.

Earlier in the day, budget carrier Citilink's chief financial officer Albert Burhan said that 16 of the 26 largest airports in Indonesia were already operating above design capacity, making it challenging to get slots.

Regional low-cost carriers have largely opted to snap up narrow-body planes from the world's two biggest plane-makers - Boeing and Airbus - placing orders in recent years at a staggering pace that has prompted concerns of over-capacity.

CAPA's chief analyst Brendan Sobie highlighted that South-east Asia has more outstanding orders than active fleets, although he also noted that travel demand in the region is growing at a faster rate than any other in the world. "Some of these orders are now being spaced out," he said.

This week, Tiger Airways said it was cancelling nine aircraft due this year and the next, instead opting to order 37 Airbus A320neo planes which would only start to be delivered from 2018. The deal, which included options for 13 more planes, would help alleviate "concerns over a potential capacity overhang in the next couple of years", the group added.