LIFE AFTER SQ006 - Orient Aviation

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i n f l i g h tGlobal catering equipment manufacturer and designer DeSter.ACS continued along its path of industry integrationwith its recent establishment of a primary partnershipwith an inflight consultancy and new strategic allianceswith two inflight equipment designers and manufacturers.CHRISTINE MCGEE reportsNew partnership and sales andsourcing agreements announced atthe industry’s annual European flightcatering conference continue equipmentcompany DeSter.ACS’s strategy of settingup a global “one stop shop” for its inflightcustomers.Speaking at the International Flight CateringAssociation (IFCA) exhibition in Barcelonain February, chief operating officer of DeSter.ACS, James Drayton, said his company, thewholly owned travel division of the DuniGroup, had entered into a operating andstrategic partnership with inflight conceptsagency, Performa.It also had signed sales and sourcingagreements with ceramics manufacturer,Wedgewood of England, and recently mergedcutlery and hollowware manufacturers,Groupe Guy Degrenne/Berndorf Inflight.The DeSter.ACS Performa “independent”partnership “will offer a complete platform forinflight services and product development”, astatement released at IFCA said.DeSter.ACS and Performa will combinetheir skills to offer an integrated package ofdesign, development and delivery of inflightservice to airlines.However, both companies stressed theirnew co-operation must not be seen as amerger of their interests. The functioning ofthe new partnership will be “independentfrom the day-to-day activities of Performa andDeSter.ACS” , the IFCA statement said.“It is an exciting and logical step for us tobe taking as it meets our ambition to be seenas a total solutions provider,” said Drayton.“It meets the needs for the market as we seemore and more carriers prepared to contractout to single source professional suppliers.”Performa• Global leader in inflight service design & delivery• Aviation specialistOne stopglobal shopmoves closerDeSter.ACS chief operating officerJames Drayton: “More and morecontractors prepared to contract out tosingle source professional suppliers”“Performa is the market leader indesigning inflight service and to combine ourskills with the recognised position and skills ofDeSter.ACS is a perfect match to provide sucha comprehensive service,” said Keith Bates,Performa’s president.Performa was set up in Australia andnow operates globally, with Bates primarilybased in Hong Kong. Its most recent inflightre-launch was the re-branding and servicedelivery transformation of British carrier, BritishMidland, into the hip bmi.Better halves of a new whole...• Public company with global resources & staff• International customer base of airlines• World-beating industry experienceDeSter.ACS• World leader inflight design concepts• Travel business focus• Recognised supplier of total solutions• International manufacturer of inflightequipment• Acknowledged global industryexperienceThe company is also well known forits role in developing Ansett International’saward-winning inflight service when theinternational arm of the Australian domesticcarrier was launched seven years ago.Stockholm-based international “table”concept and equipment manufacturer, Duni,bought DeSter.ACS last year. In the last 14months, DeSter.ACS has consolidated itsproduction and marketing into a new operationscentre and headquarters in Belgium andmanagement, sales and production centres inHolland, Sweden, Thailand and the U.S. It alsohas sales offices in several other countries; themost recent being the opening of a regionalrepresentative office in Beijing, China.DeSter.ACS also chose IFCA to unveil itsnew sales, marketing and sourcing partnershipswith manufacturers Wedgewood ofEngland and Groupe Guy Degrenne BerndorfInflight. Drayton said DeSter.ACS will assumecharge of worldwide sales of Wedgewoodof England products to airline customerswhile the ceramics manufacturer will takeon total sourcing for all DeSter.ACS ceramicsworldwide.The Guy Degrenne/Berndorf partnership– the Degreene group bought 70% ofBerndorf in 2000 – with DeSter.ACS has anevolutionary element in its operations. DeSter.ACS will be, as with Wedgewood, the worldsalesman for the cutlery and hollowwaremanufacturer and Guy Degreene/BerndorfInflight becoming the Duni subsidiary’s soleinflight flatware and metal accessories supplier.However, the metalware manufacturer,which produces most of its products in theAsia-Pacific region, will continue to supply aselected group of its own clients under thenew partnership. As well, existing contractssigned by all parties will be honoured untilthey lapse.32 | Orient Aviation | March 01
COUNTRY FOCUSBY TOM BALLANTYNEJAPANTackling the oddsRivals co-operate to overcome economic hardshipsLife has not been easy for Japan’s airlineindustry during the last decade. Twodownturns, one following the Gulf Warin the early 1990s, the other Asia’s most dramaticeconomic recession later in the decade,battered the nation’s confidence. Coupledwith high labour costs, volatile fuel pricesand an economy struggling to emerge fromstagnation, airline profits have been all butnon-existent.Coping with tough market conditions is achallenge at the best of times and, as the restof Asia knows all too well, that experience hasnot been confined to Japan in the nineties.But Japan Airlines, All Nippon Airwaysand Japan Air System have had their attemptsto restructure and rationalise made more difficultby other issues. These include breakingdown traditional employment practices, copingwith unprecedented levels of internationalcompetition, integrating domestic deregulationand managing demand on ever-presentslot constraints at the country’s primary airporthubs; facilities charging the world’s highestaeronautical fees.Now, just as traffic growth has broughtprofit back to the balance sheets, the indicatorssuggest more dark economic clouds aregathering over the Land of the Rising Sun.In February, a revision downwards ofJapan’s latest economic growth figures raisedthe spectre that the world’s second-largesteconomy is back in recession at a time whenglobal growth is faltering. Simultaneously, theU.S. economy is slowing, a fact, if it persists,that would impact severely on Japan.Such difficulties are nothing new toJapan’s airline majors. Their patient shareholdershave stoically accepted a lack ofreturns on investment for years. They must berelieved there is clear evidence carriers havemade significant progress in implementingrestructure and rationalisation, introducingnew efficiencies and innovative planning;all planned to dramatically change JapaneseCongestion at Tokyo’s airports a majorproblem for airlinesairline operations.Bitter rivals in the air have put theirdifferences aside to co-operate on the groundwith joint maintenance and informationtechnology ventures designed to save money.The carriers have even come together tomarket a united shuttle service on the mainlineTokyo-Osaka route in an attempt to competebetter with high speed train services.All the airlines welcomed the deregulationof the nineties that resulted in more competitivepricing, freedom to adjust networks andpermission to eliminate loss-making domesticservices on routes that were formerly forcedto operate for reasons of community service.Deregulation also allowed new entrantsto take to the air although slot restrictions atTokyo’s domestic Haneda Airport have madelife difficult for the newcomers to compete adequatelyagainst incumbents. There are signsat least one, Air Do, is struggling to survive.The big operators, despite their achievementsof the last five years still face mammothchallenges. Managements know they mustcontinue a relentless drive to force down costsand further improve productivity if they are toearn “true” profits.They know much of their future dependson Japan’s ability to resolve its airport problems,particularly at Tokyo and Osaka, whereenvironmental issues and years of bitter debatehave slowed the pace of expansion andfrustrated airline managements world-wide.As neighbouring South Korea prepares toopen its new multi-billion dollar hub at Inchonin April and with several other expensive newfacilities operating around Asia, Japan needsa new Tokyo airport or, at least, much greaterexpansion at the existing airports. The needis great and the need is urgent.The country’s airline and aviationauthorities must also find a solution to thelong-running dispute with the U.S. over airrights, essential in formulating policies whichwill accommodate the global industry’sinevitable march towards liberalisation andopen skies. Japanese economic health is oneof the key pistons in the engine driving Asia-Pacific aviation.The travel patterns of the country’s businessand leisure travellers impact significantlyon the bottom lines of airlines elsewhere.Whether or not its carriers succeed in theirongoing drive to cement real and consistentprofitability into operations in the face ofthe major challenges confronting them, andwhether the airports issue can be satisfactorilyresolved, will undoubtedly be criticalto the well being of the industry across theregion.IN THIS REPORTPage 34: JAL president Kaneko leadsdramatic turnaroundPage 37: All Nippon revises profitsupwardsPage 38: Airports under pressurePage 39: Call for reform for accidentand safety investigationsMarch 01 | Orient Aviation | 33
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LIFE AFTER SQ006 - Orient Aviation

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