The Australian federal government has committed to building a second international airport in Sydney valued at A$5 billion (US$3.7 billion), with construction scheduled to start next year.

Sited in Badgery’s Creek, the airport is expected to serve about 2.2 million people in western Sydney.

Sydney Airport Corporation runs the existing Mascot airport

According to reports, the commitment came after Sydney Airport Corporation declined to take on the project, citing risks on monetary return for investors as the main reason.

Details on the project will be announced in the federal budget next week.

AirAsia has unveiled more domestic routes from its secondary hubs in Malaysia as well as several new connections to China and India launching this year.

The Malaysian LCC commenced a Kuala Lumpur-Bhubaneswar (India) flight on April 26, the first international airline to fly into the east Indian city and capital of Odisha, which Malaysian agents expect to spur FIT demand.

“Prior to the opening of this route, travellers from Bhubaneswar and surrounding areas would have to take flights from Chennai, Mumbai or Kolkata to travel to Malaysia,” A Aruldas, managing director of Tourland Travel, said. “The new flights are also timely with Malaysia’s relaxation of the visa facility for Indian tourists.”

Come August 9, AirAsia will begin a thrice-weekly service connecting Langkawi to Shenzhen for the first time and four-times weekly flights between Langkawi and Kuching that same day.

Other new domestic routes include the inaugural Johor Bahru-Langkawi service launched since April 28, in addition to the upcoming Johor Bahru-Kuala Terengganu flights commencing June 22.

Kuoni’s new owner EQT is selling another chunk of Kuoni’s business, this time its DMC network comprising AlliedTPro US, Asian Trails, Australian Tours Management, Desert Adventures/Gulf Dunes Middle East and Private Safaris Africa, to Thomas Cook India.

In Asia, Asian Trails’ CEO Laurent Kuenzle told TTG Asia this morning in a phone interview that the Asian Trails brand, leadership and team would be retained and that the shift in new ownership would strengthen the DMC further.

“They didn’t buy Asian Trails to make a Thomas Cook India out of us,” said Kuenzle.

“Thomas Group India believes that the original people who manage a company are the key drivers to its success. They are buying the entrepreneurial spirit, the management team that leads the company, and they are interested in the synergies that can be had,” he said.

Kuenzle expects a lot of synergies and growth, particularly from the Indian market. “They buy us because we are specialists and we are international, i.e. we have the expertise to handle international markets (travelling to Asia). We have a Spanish team, French team, Italian team, etc, to handle the individual needs of these clients and this will continue as always. Plus we look forward to harness the potential of the Indian market. We already handle Indian clients, including from Thomas Cook India, and as you know the potential of this market is enormous.

“It’s a change in ownership, but nothing changes except this puts us on a growth trajectory,” said Kuenzle.

Asian Trails is established in eight countries in the region (excluding Australian Tours Management which reports to it). In all, it has 33 offices in the region.

Kuenzle: ownership change puts Asian Trails on growth trajectory

Thomas Cook India had previously bought Kuoni businesses in India, i.e. the outbound travel brand SOTC and DMC SITA, and Kuoni Hong Kong, before the Swiss tour operating company completely sold itself to EQT. Its style has always been to acquire “exceptional management teams”.

In an October 2015 interview, Madhavan Menon, Thomas Cook India’s managing director, told TTG Asia: “We don’t have the ability to run them (the travel businesses it acquires). It’s never our policy to interfere. It’s the same when we were acquired by Fairfax and it’s exactly what we’ll replicate.”

Thus far, it has left Kuoni Hong Kong alone. Thomas Cook India and SOTC India operate separately but share backend services. Only Kuoni India’s inbound business, Kuoni Destination Management, which operates under SITA, will be merged with Fairfax’s Travel Corporation of India, ending the use of the Kuoni brand in India in the coming months. “The value of SOTC, 59 years old, and SITA, 55 years old, is far higher,” Menon had said in that interview.

At press time, Menon could not be reached for comments on the latest acquisition.

The deal does not include Kuoni Destination Management Europe and Kuoni Destination Management US (global MICE business) which remain in Kuoni’s Global Travel Services division. These aren’t part of the destination management specialists network.

EQT, which is also selling GTA to Hotelbeds, is left with what some say is the jewel in the crown, the highly lucrative VFS Global, visa and passport facilitation services. Some industry observers speculate that’s the reason why it bought Kuoni, however it could not buy only VFS but the rest of it.

Emerging markets and technology uptake will drive the global business travel sector growth by 3.7 per cent annually over the next decade from its current US$1.2 trillion, as revealed in a Travelport and WTTC report released at the WTTC Global Summit in Bangkok.

The business travel market in the Asia-Pacific will overtake Americas with a growth rate of 6.2 per cent each year to 2027. China is expected to the way with 9.5 per cent annual growth, followed by Myanmar (8.7 per cent), Hong Kong (eight per cent), Cambodia (7.4 per cent) and India (7.2 per cent).

Currently, the largest business travel markets are the US, China, the UK, Germany and Japan.

According to the report, business travel is often the driving force in the overall growth in contribution of travel and tourism to national GDP as companies continue to find ways to develop new markets and maximise their revenues.

The report also incorporates White Paper proposals underlining the need for investment in technology and infrastructure, the removal of visa burdens, tackling cyber security and personalising services for travellers.

As well, technology is expected to be key in driving the growth in the business travel sector, where a Travelport research highlighted that business travellers want mobile phone alerts and information about disruptions, flight updates and upgrades. In addition, the report reveals that the industry needs to focus on serving digitally-connected millennials in order to engage customers more effectively.

CEO of Travelport, Gordon Wilson, commented: “Every day we see business travel growing at a significant rate in many emerging markets with technology playing an increasingly important role in easing the way for those on trips for their work. As an industry we need to continue to invest in the best technologies and infrastructure while governments need to be more business-friendly by removing burdensome visa requirements.”

Stabilising fuel prices and a new generation of fuel-efficient aircraft models may bring some relief to airline operators in the current aviation landscape, but AirAsia Group CEO Tony Fernandes believes that legacy carriers will encounter greater challenges in their business models as they seek to cut costs in the face of fierce low-cost competition.

Speaking at the recent WTTC Global Summit in Bangkok, Fernandes shared his prediction: “In time you’re going to have two different airline models – LCCs will do the economic class and full-service carriers doing the premium sectors.”

Fernandes speaking during WTTC’s 17^th Global Summit in Bangkok 

The presence of four classes – first, business, premium economy and economy – among some airlines is deemed “very inefficient” in Fernandes’ eyes. “One Singapore Airlines seat will be equal to 40 of mine,” he quipped. “We are more fuel-efficient and eco-friendly than any airline out there because we carry more passengers per foot.”

What about hybrid carriers, the business model that straddles between full-service and no-frills carriers, asked TTG Asia. The outspoken airline chief thinks it’s a “disaster” for legacy airlines to pursue the hybrid business model. “Hybrid carriers is where airlines kind of messed up, as they (full-service carriers) compete with LCCs. You choose either one (business model),” he said.

Fernandes also expects the arrival of a new generation of fuel-efficent aircraft the likes of Boeing 787 Dreamliner and Airbus A330neo will help LCCs to optimise their routes and network performance and push the envelop of more longhaul, low-cost models.

Commenting on Norwegian’s plans to launch budget flights on the London Gatwick-Singapore route, Fernandes said: “We are jealous of Norwegian; they have the right aircraft (Boeing 787-9 Dreamliner)… We want to go to Europe, but the Ukraine incident put an extra hour on our aircraft.”

He also doesn’t rule out the possibility of resuming services to Europe or flying farther afield to the west coast of North America on AirAsia X. The longhaul budget carrier last flew to Paris (Orly) and London (Gatwick) in 2012, and recently announced the launch of services to Honululu in 2018.

However, London may not be on AirAsia X’s radar when it returns to Europe. “There are many interesting points in Europe, so it may not be a hub airport like London. It may be Manchester or Dublin,” Fernandes said.

When asked where aviation is heading, Fernandes sees tremendous opportunities for airlines to keep costs down especially in their use of data. “Data excites me tremendously. The data explosion will decrease costs and increase revenue… I hope governments will use data to improve security and make travelling easier.”

Tauzia Hotel Management last week opened POP! Hotel Banjarmasin, in the capital of South Kalimantan, marking the brand’s first property on the Indonesian island.

Banjamin Castel, director of operations at POP! Hotels, believes that Banjarmasin, with its unique proposition from competitors, offers an “interesting” market for the budget hotel brand.

(From left) POP! Hotels’ Reza Fordaus and Benjamin Castel; Tiga Putra Rukun Makmur’s William Ardianto; andv Yello & POP Hotels’ Narantara Sitepu

Investment of the 120-key hotel is US$350,000 per room, excluding land, and return on investment is expected within five to seven years.

Narantara Sitepu, brand manager Yello & POP! Hotels of TAUZIA Hotel Management, said: “Smart travellers, the target market of POP! Hotels, are dynamic, young travellers who know what they want and smart in managing their budget.”

As such, the Pitstop lobby, with its blend of a café lounge and convenient store open round the clock, is conceived not just for hotel guests only but also as an interactive social hub for young business professionals and millennials.

William Ardianto, director of owning company Tiga Putra Rukun Makmur, said: “(A 24-hour café) concept like Pitstop is new to Banjarmasin. To attract travellers and the locals, we will introduce local cuisines, such as soto banjar and traditional cakes at the outlet.”

POP! Hotel Banjarmasin is the brand’s 21st property in Indonesia and 17 more properties are expected to open until 2022.

Garuda Indonesia has yesterday moved its international operations to Terminal 3 of Jakarta Soekarno-Hatta International Airport.

The departure of Kuala Lumpur-bound flight GA820 and the arrival of GA823 from Singapore marked the start of Garuda’s operations from the new terminal.

Terminal 3 of Jakarta Soekarno-Hatta International Airport; photo credit: Indonesia’s Ministry of Tourism

The Indonesian national carrier has moved its domestic operations to Terminal 3 in August 2016, becoming the first airline to operate from Terminal 3. Other Skyteam alliance members will follow after Lebaran, which falls in June this year.

Pahala Mansury, president and CEO of Garuda, said: “Garuda is optimistic that Terminal 3 International will not only be a move to improve infrastructure and transportation service with global competitive advantage but also a milestone for the development of tourism (in Indonesia).”

Garuda will in stages operate 26 check-in counters and increase its executive lounge capacity to 350 seats for business class and 56 seats for first class passengers, which is twice the current capacity at Terminal 2.

The airline will operate 36 self check-in outlets and 10 boarding gates by July.