LIFE AFTER SQ006 - Orient Aviation

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By Jonathan SharpThe scheduled arrival in March of aGulfstream IV at Metrojet Ltd marks animportant step – but by no means thelast – for the Hong Kong company as it positionsitself to take advantage of what it seesas major opportunities for business aviation.Mark Turner, managing director of MetrojetLtd and Heliservices (HK) Ltd, said Metrojetwill operate the 11-seat Gulfstream for theU.S. manufacturer, but with the aim of sellingit in the next 15 months. He thinks he canfind a Hong Kong buyer. “That’s not to say wehave somebody in line waiting to buy it.” Aswell as managing the jet, Metrojet is qualifiedto perform maintenance on it and will put itout to charter at about US$6,000 an hour.Established in 1995 as part of the KadoorieGroup, Metrojet has been flying aHawker 700 that it bought as a means toacquire an Air Operator’s Certificate and toset up a flight operations department so asto establish credibility as an aviation managementcompany.“But our Hawker is not the aircraft tointroduce to the local market because it istoo small. When you introduce an aircraft to apotential client you want one that has all theleading-edge technology and the bells andwhistles as well as the comfort and room thatthey have grown accustomed to.”Metrojet’s next step, to reorganize thecompany to bring greater efficiencies, isimminent, Turner said. “We are trying to bea bit more efficient because we think we areat the start of some really good opportunitiesfor business aviation.”He said Hong Kong regulatory authoritieshad previously not provided a welcomingenvironment for business aviation. This waspartly because of space constraints at the oldKai Tak airport. This had meant there was agood chance a private plane would have todrop off passengers in Hong Kong and thenfly somewhere else to wait for the returnleg because there was no room to park atKai Tak.Those constraints disappeared with the1998 opening of the new Hong Kong InternationalAirport at Chek Lap Kok, includingan extensive Business Aviation Centre withMetrojet as a shareholder. However, as otherregional operators agree, constraints persistin neighbouring mainland China in the formof restricted access and high cost.But attitudes are changing. “The importantthing with regard to regulatory authorities,whether we are talking about Hong Kongor the mainland, is that there has been aNew airportopens the wayfor MetrojetMark Turner, managing director of MetrojetLtd and Heliservices (HK) Ltd: some reallygood opportunitiesfor business aviationsignificant adjustment in attitudes towardsbusiness aviation,” said Turner.“On the mainland they recognise that(business aviation) is a means of bringingpeople into the country that can contributeto the development of the country and it’s intheir best interest to facilitate this.”Turner said Hong Kong’s problem wasthat Beijing still treated it as a foreign countryfor aviation purposes, despite the 1997handover of sovereignty by Britain.He said it costs Metrojet over US$8,000in fees and ground service charges to fly theHawker to Beijing. “For my competitor, whois based in Beijing, for him to fly around andinto Beijing costs him $26. No zeros.”When that operator flew to Hong Konghe paid just the same fees to land in the territoryas Metrojet. The upshot was the Beijingoperator can fly to Hong Kong empty, pick uppassengers for Beijing, return them to HongKong and fly home empty at lower cost thanMetrojet just flying Hong Kong-Beijing-HongKong.“So the playing field is not level. As aHong Kong company we are offended bythe fact that we are treated exactly like U.S.,British, Australian or any other entities. Weare an SAR (Special Administrative Regionof China), but we don’t get any credit or recognition.”To add insult to injury, the Beijingoperator can fly any route he chooses in themainland whereas Metrojet must fly designatedroutes sometimes hundreds of mileslonger. These are the hurdles that we have toget over for this really to prosper in the waywe know it can.”To help overcome these and other hurdles,Turner has been a prime mover in theformation of the Asian Business Aviation Association(ABAA), which met in June last yearin Hong Kong and at the Zhuhai air show inmainland China in November.Development of the ABAA is “probablythe most important thing that operators cando for themselves,” said Turner. “We’ve got alot of momentum,” he said, plus support fromfellow professional bodies.Metrojet: operating an 11-seat Gulfstream jet for the U.S. manufacturerMarch 01 | Orient Aviation | 47
B U s i n e s s D i g e s tRPK GROWTH RATESSET TO RECEDEIn November, members of the Association of Asia Pacific Airlines(AAPA) reported 8.5% and 8.2% growth in revenue passengerkilometres (RPK) and passengers carried (PAX), respectively.Capacity expanded 7.9%, resulting in a passenger load factor (PLF) of73.1%, up a marginal 0.4 of a percentage point year-on-year.Five airlines recorded more than 10% growth with GarudaIndonesia (GA) leading the group with 33.9%. The other four carrierswere China Airlines (CI – 21.9%), Vietnam Airlines (VN – 20.1%),Royal Brunei Airlines (BI – 13.7%) and Ansett Australia (AN – 12.7%).No airline reported negative RPK growth.PLF growth moderated further from October, with only fiveairlines recording improvements. Garuda Indonesia (8.5 percentagepoints) once again headed the list, followed by Japan Airlines (JL– 4.3 percentage points) and Royal Brunei Airlines (3.3 percentagepoints). On the other hand, seven airlines experienced a decline inload factor, ranging from 0.3 percentage points (China Airlines) to3.8 percentage points (Vietnam Airlines).Airlines with high load factors were Asiana Airlines (OZ – 77.3%),Japan Airlines (77%), Thai Airways International (TG – 76.6%) andSingapore Airlines (SQ – 76%). Seven other airlines reported PLFs inthe low 70s (%). Royal Brunei Airlines posted under 70%.Cargo ResultsIn the light of the U.S. economic slowdown, freight tonne kilometres(FTK) grew by only 5.8%, but this was better than October’sgrowth of 3.5%. Capacity expanded 8.2%, resulting in a reducedfreight load factor (FLF) of 1.6 percentage points to 70.2%.All but three airlines managed to register FTK growth. Experiencingstrong cargo growth in November were China Airlines(16.8%), Ansett Australia (16.2%) and Cathay Pacific Airways (CX– 11.2%). Of the three airlines showing a decrease in FTKs, JapanAirlines and Korean Air (KE) contracted less than 1%, while RoyalBrunei Airlines contracted 13.7%.Only Garuda (6.6 percentage points) and Korean Air (1.1percentage points) recorded improvements in FLF. The remainingairlines registered a decline with Royal Brunei Airlines (11.6percentage points), Vietnam Airlines (7.5 percentage points) andEVA Air (BR – 5.5 percentage points) recording the sharpest fall inload factors.Freight load factor (FLF) remained high for six airlines, exceedingthe 70% mark. Ansett Australia recorded 81.8%, followed by ChinaAirlines (81.2%), Asiana Airlines (79.2%), EVA Air (78.7%), CathayPacific Airways (75.4%) and Korean Air (74.7%). The others turnedin load factors below 70%.Results for the 12 monthsending November 30 2000The consolidated RPK figures and number of passengers carriedfor the 12-month period under review increased by 11.2% and 9.4%respectively. Seat capacity rose 8%, resulting in a 2.2 percentagepoint improvement in load factor to 75%.Growth in RPKs during the 12 months varied among member40RPK Growth by CarrierPercentage (Nov 00 vs Nov 99)30PAX Growth by CarrierPercentage (Nov 00 vs Nov 99)30202010100SQCX BR OZ TG KEJLANBI VN CI GA0CXSQTGOZKEBRBIJL CI AN VN GA48 | Orient Aviation | March 01
Page 1 and 2: VOL. 8 NO. 5 MARCH 2001MAGAZINE OF
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Page 5 and 6: N E W SRegional round-upTHAI “wil
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Page 21 and 22: COUNTRY FOCUSBY TOM BALLANTYNEJAPAN
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Page 25 and 26: As ANA names a new president ...Pro
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Page 29 and 30: Commuter & Business Aviationin the
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Page 33: s p e c i a l r e p o r tBy Jonatha
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LIFE AFTER SQ006 - Orient Aviation

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