A BUYER’S market is emerging in the aviation industry as secondary airports woo legacy airlines and low-cost carriers (LCCs) with incentive schemes and enhanced operations.

Centre for Asia Pacific Aviation executive chairman Peter Harbison noted that airlines now have more clout when negotiating charges, as smaller airports “come up with deals because they are keen to get more clients”.

Steven Fitzgerald, Wellington Airport’s chief executive, said: “Ten years ago, airlines assumed that airport charges were non-negotiable. Now, they ask for (discounts and incentives). They can shop around.”

LCCs are far more aggressive when it comes to negotiations, Fitzgerald revealed. “Legacy carriers move capacity to predetermined routes and seek good deals, while LCCs go where the better deal is. LCCs have an idea of where they want to fly, but where they land would depend on the economics.”

According to Fitzgerald, the winners tend to be airports that have a destination base, offer incentives to carriers, and bring down airlines’ operating costs by reducing turnaround time, providing technology to facilitate work processes and assisting with marketing deals to promote some routes.

By Ollie Quiniquini

INDIA extended its visa-on-arrival (VOA) scheme on Tuesday to citizens of Indonesia and Myanmar.

The VOA scheme, first introduced in January last year (TTG Asia e-Daily, January 8, 2010) to promote tourism to the country, is also available to citizens from Japan, Singapore, Finland, Luxembourg, New Zealand, Cambodia, Laos, Vietnam and the Philippines.

The single-entry VOA facility, available in Delhi, Mumbai, Chennai and Kolkata airports, costs US$60 per person and is valid for a maximum of 30 days.

Qualified tourists can avail of the VOA a maximum of two times in a calendar year, with a minimum gap of two months between each visit. It is non-extendable and non-convertible.

A total of 6,569 tourists had used the facility between introduction and December 2010.

By Anand & Madhura Katti

INDIA’s largest private sector airport operator GVK Power and Infrastructure has reached an agreement with the Indonesian government to develop two new international airports in North Bali and Yogyakarta.

The arrangement between the Indonesian government and GVK provides exclusivity to the company which operates two key airports in India – Chhatrapati Shivaji International Airport, Mumbai and Bengaluru International Airport – which together handled passenger traffic of 40 million in 2010.

GVK will take charge of planning, design and development, operations and management of the new airports, as well as all associated infrastructure, land and commercial development.

By Anand & Madhura Katti

OUTBOUND agents in Kuala Lumpur are seeing double-digit growth in demand for longhaul tour packages, especially to Central and Eastern Europe, this year compared to last.

Mayflower Acme Tours deputy general manager Abdul Rahman Mohamed, who has seen demand for tours to Central and Eastern Europe this Chinese New Year increase by 30 per cent compared to the same period last year, attributed this to the favourable exchange rate and cheaper total package rates this time round.

Parlo Tours general manager Kerry Tam also noticed the stronger demand from Malaysian tourists this year for tours to the continent, with a 50 per cent growth in sales over 2010 for her Central and Eastern European packages.

“The demand last year didn’t start picking up until the Malaysian Association of Tour and Travel Agents (MATTA) Fair in March,” she said.

Meanwhile, Malaysian Harmony Tours & Travel CEO Cooper Huang said overall demand for his tour packages this year had dropped by 20 per cent from 2010, due to the Chinese New Year period coming too soon after the year-end school holidays.

However, Huang still saw a 30 per cent growth in sales of tour packages to Central Europe as well as to “exotic” destinations such as Turkey and Egypt.

INDONESIAN interest in travel to Thailand has been on the upswing, following aggressive campaigning by the Thai government after political instability in its capital last year.

Genta Tours Jakarta managing director Dharmawan Raharja said: “The appeal of the destination has increased for the (Indonesian) incentive market. We have got a number of groups going there.”

OMT Holidays and Tours Thailand managing director Dave Chang is thinking of tapping this particular sector. “We see many Indonesian incentive groups to Phuket nowadays, especially on AirAsia flights.”

Genta’s Raharja said cheaper prices in Thailand, compared to Singapore and Hong Kong, were a major factor pushing the trend.

Garuda Indonesia general manager for Thailand, Myanmar, Laos & Cambodia Bambang Sunan agreed, saying the aggressive pricing of hotels in Thailand had drawn the Indonesia market.

Sunan said Garuda’s load factor to Thailand in the last quarter of 2010 had increased to an average of 86 per cent. About 60 per cent of these travellers were Indonesian.

“The load factor so far continues to be in the high 80s,” he said. “If the Red Shirts are not in action again, then I am confident the market will continue to grow.”

THAI AirAsia has just launched its Chiang Mai hub, the third in the country, with new daily direct flights to Singapore and Hat Yai starting January 24.

The maiden Chiang Mai-Hat Yai flight recorded a full load factor, while the inaugural Chiang Mai-Singapore flight saw more than 80 per cent of seats occupied.

Thai AirAsia CEO Tassapon Bijleveld said the introduction of the Chiang Mai-Singapore route would allow travellers from Singapore to reach Chiang Mai in two hours and 50 minutes without the hassle of having to transit in Bangkok.

SilkAir also operates on the Chiang Mai-Singapore route with four flights per week.

Thai AirAsia’s two new routes come a month after it launched a four-weekly service between Bali and Phuket (its second hub in Thailand) in mid-December last year. Its main hub in the country is Bangkok’s Suvarnabhumi Airport.

Meanwhile, the Thai LCC has taken delivery of its 20th Airbus A320 this week. It also plans to launch a Bangkok-Hangzhou service next month.

BUOYED by strong traffic growth between the two countries and an interline agreement between Jet Airways and Garuda Indonesia, the Indian travel trade is seeking a greater share of Indonesian travellers.

Jet Airways – in partnership with Garuda Indonesia, Tamarind Tours and Taj Hotels – recently held its first travel product presentation to Indonesian agents in Jakarta.

Charge d’Affairs to the Indian Embassy in Jakarta, Ravish Kumar, said: “Despite Indonesia’s large population, the number of Indonesian-Indians and some 10,000 Indian expatriates living in the country, our number of Indonesian arrivals in 2009 was only 18,000 or 0.37 per cent of total arrivals.”

In comparison, countries like Malaysia, Singapore and Thailand have been delivering between 50,000 and 135,000 arrivals annually.

Tamarind Tours India managing director Mahesh Shirodkar said the door of opportunity to tap Indonesian traffic was “wide open”. He planned to first work with local agents to grow the market, before opening an office in Indonesia.

Indonesian outbound agents, however, said India needed to raise awareness of its offerings.

Bayu Buana Travel Services corporate relations manager Jenny Chandra said: “Those who buy our India programme are mostly seasoned FIT travellers looking for a new place to visit.”

AFTER a record-setting 2010, Vietnam will step up efforts in key markets and attract more dollars from tourist shopping in order to meet its ambitious targets this year of 5.3 million foreign visitors and US$5.6 billion in revenue.

In 2010, the country recorded more than five million visitor arrivals, a growth of 34.8 per cent compared to 2009, far exceeding the initial target of between 4.2 and 4.5 million. Revenue also jumped by 37 per cent over 2009 to US$4.8 billion.

Vietnam National Administration of Tourism (VNAT) chairman Vu The Binh said the key source markets of China, Japan, South Korea, Europe and ASEAN would receive greater marketing attention this year.

“We have very high expectations of receiving two million Chinese visitors, one million Japanese, 700,000 South Koreans and 500,000 Thais this year,” he said. Europe is also expected to supply some 800,000 visitors.

VNAT also noted that foreign visitors currently spent only 20 per cent of their trip expenditure on shopping, a trend it hopes to change. In Thailand, more than half of tourist spending goes to shopping.

To increase shopping revenue, the country will mantain its Vietnam – Your Destination campaign, which tempts tourists with bargains.

By Luat Tran

AIR policy liberalisation and the continued growth of low-cost carriers (LCCs) are opening up hub opportunities for smaller airports in the region.

According to Steven Fitzgerald, chief executive of Wellington Airport, airlines are increasingly setting up hubs in destinations other than their home country, leading to intense competition among airports to woo these carriers.

Centre for Asia Pacific Aviation executive chairman Peter Harbison said: “Most airports have been effective because they are hubs. This will only work if you have a liberalised marketplace.

” Liberalisation, Harbison added, had opened up new city-pairs that would not necessarily be sustainable for airlines to operate from bigger airports. “Smaller airports, which handle mainly point-to-point traffic, will benefit as this is where the growth is.”

LCCs are also driving passenger growth to new destinations through their budget fares. AirAsia X’s hubs in the Pacific are a case in point, said Fitzgerald.

“To become a hub, airports do not need a network airline but an airline with a strong network that offers a range of connections. At the same time, airports must look at passenger hubbing rather than airline hubbing and fill the product gaps in interline services,” Fitzgerald said.

By Ollie Quiniquini

THAILAND is set to gain yet another airline – Thai-Korean joint venture Crystal Thai Airlines (CTA) plans to begin flying between Bangkok and Incheon and Muan on February 3.

Both routes are scheduled for twice-weekly flights on an Airbus A320 in a 174-seat all-economy configuration.

The full-service carrier plans to lease a bigger and longer-range A330-200 in March to launch flights linking Phuket to Incheon. A second A320 is also in the pipeline, and CTA hopes to expand services to include Mumbai, Cochin, Clark, Colombo, Thimphu and Dubai.

Aiming to be the country’s third-largest airline after Thai Airways International and Bangkok Airways, CTA was established last year with a start-up capital of 201 million baht (US$6.5 million). Thai businesswoman Manika Sawasdipan fronts the 51 per cent share and undisclosed South Korean partners with strong travel agent connections own the remaining 49 per cent.