Ep 17: In Conversation: The Current State of Aviation in Asia-Pacific with Mac Patel, OAG

In this episode, Gary interviews Mac Patel, JAPAC Regional Sales Director for OAG, a global leader in flight information and intelligence.

The broad-ranging discussion covers the impact of COVID-19 on airlines and airports, and the “strategic decision-making” needed across the travel sector in Asia Pacific.

We address several key issues, including LCCs, Long-Haul, Airline Restructuring, Hub Airports, Major Air Markets, Travel Bubbles, Intra-Asia Travel, Health Screening and the infamous “Middle Seat”.

Show notes

01:11 Mac is based in Singapore, with a regional office in Japan

01:45 Talks about growing up in Fiji, where his father was a board member of Air Pacific, so he grew up with aviation

“From eight years old […] everything I did was rooted in aviation, all the projects at school.”

03:10 Compares the differences in Fiji’s tourism market back then with today

04:15: Studied in Australia, worked for Qantas, Air New Zealand and Ansett Australia. Moved to Montreal to work with IATA. Has since worked in Singapore and Bangkok

04:58 Discusses how the airline industry and distribution have changed in Asia

“I do recall 15 years ago, people said low-cost airlines wouldn’t work, but look at their track record and some of the development [in South East Asia, North Asia and India].”

06:33: Discusses how full-service carriers have responded by interlining, and operating low-cost subsidiaries within the same group

07:30 The developing impact of COVID-19 on aviation in Asia Pacific from February 2020 onwards

“I was travelling right up until 13 March in Indonesia and India, where there were no cases reported at that time. It seemed like business as normal […] but I was wearing a mask on flights.”

08:50 China, Hong Kong and North Asia markets started to taper off in early February, especially in major air hubs. In South East Asia the impact came in a bit later; Singapore saw capacity changes start to taper in the week beginning 23 March

“Capacity moved aggressively because of changes in traffic patterns, government advisories and a lot of cases coming online in different countries.”

“If you look at Singapore, if you cut down the transit traffic that cuts down the majority of your inbound and outbound travel.”

11:10 How has COVID-19 impacted OAG’s business model?

“The essence of OAG is to provide data to the air industry, and this has been a significant time for the industry to see that data, and the capacity changes […] and what this means to destinations and tour operators […] and the knock-on effects.”

12:40 The recovery will be in stages, whether in domestic, regional or long-haul

14.20 More airlines may go into administration or restructure, and there could be consolidation and fleet simplification

“The big question could be ‘What will be the role of long-haul low-cost carriers, and how will they shape up over the next 12 months?’”

17:34 Every government is trying to work its way through the situation, and Australia saying it will keep borders closed is one approach

“You never know what is a good strategy, but the priority of any government is to protect its citizens […] and this is Australia’s call.”

19:48 Are travel bubbles likely to happen?

“The concept of travel bubbles is interesting […] It’s a sign of endorsement that things are under control, and a process that you will get screened as you travel through.”

20:00 ASEAN has some complex and diverse air markets

22:40 The May 2020 Golden Week air traffic demand in China, Japan and South Korea

23:50 India and Chinese inbound travel to South East Asia – two key source markets for how tourism is created, as well as offering growing middle classes and secondary markets

“Singapore has always been a strong market for Indian travellers, as a transit or holiday destination. Thailand saw rapid growth [in Indian arrivals] for destinations like Phuket […] Some people living in Calcutta would take a short weekend break to Bangkok.”

“If you look at the Chinese market, that constituted about 28% of Thailand tourism in 2019.”

“What is happening now, there could be less disposable income for people to travel so their recovery could be phased out over a period of time.”

26:45 How will airlines implement new health and safety protocols?

“I think there will be coordination between airports and airlines. There will be strict screening at airports. The question is if you get tested at one airport, do you need to get tested at the other end as well?”

“Airlines and airports as well as health authorities of different countries will be involved in making sure they have the safest methods to implement something that is a traveller-sensitive outcome, and is accepted by the industry.”

29:00 Thoughts on the overall recovery in Asia Pacific, including different waves depending on how quickly the coronavirus is contained

“There are a lot of variables at play.”

30:45 As a frequent flyer, where will Mac be travelling next (once it is possible to do so)?

“Generally, where are our customer businesses are. Japan will be a key area […] We were planning to go to Europe [as a family] this summer, but we may have to wait until December and see what happens from there.”

Resources

www.oag.com