Special Guest Speaker Conrad Clifford Regional Vice President Asia Pacific IATA
Outlook for the Airline Industry –
Growth or Gridlock in the Asia Pacific?
CONRAD CLIFFORD
Regional Vice President
IATA Asia Pacific
Asia Pacific Airlines’ ROIC Lagging Europe and US
Source: IATA Economics using data from The Airline Analyst
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2010 2011 2012 2013 2014 2015 2016
EBIT
adj
uste
d fo
r op
erat
ing
leas
es a
s %
in
vest
ed c
apita
l
Return on invested capital
Industry average
North America
Europe
Asia Pacific
Latin AmericaMiddle East
Weighted Average Cost of Capital
Growth has Returned to Air Cargo
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
-30%
-20%
-10%
0%
10%
20%
30%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
% year-on-year % year-on-year
Growth in industry FTKs Global PMI new export orders component (adv. 2 months)
Sources: IATA Economics, IATA Monthly Statistics, Markit
Implied PMI series if the index remains flat at its
February 2017 level over the coming months
2
3
4
5
6
7
8
9
2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034
Global O-D passenger journeys (billion)
Constant policies scenario
Reflation/open borders scenario
Pick-up in Protectionism scenario
Source: IATA/Tourism Economics Air Passenger Forecasts, September 2016
Long-term Expansion Even in Gloomy Macro Scenario
Security is the New Safety
The Rising Tide of Protectionism
ASIA PACIFIC
Potential Growth and the Rise of LCCs
2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
US
China
UK
Japan
Spain
Germany
India
Italy
France
Indonesia
China
US
India
UK
Indonesia
Japan
Spain
Germany
Brazil
Turkey
Source: IATA/Tourism Economics Air Passenger Forecasts, September 2016
Significant Change in Top-10 Markets over Next 20 Years
Source: IATA Economics
Change in LCC Penetration, 2005 - 2016
Airline Model Spectrum
Low Cost Carriers Full Service Carriers
ASIA PACIFIC
What’s Holding It Back?
INFRASTRUCTURE - a dire situation
PEK Beijing Capital 567,759 1.9% 2019 83.7 2.2% FULL
PVG Shanghai 371,190 2.6% 2021 47.2 5.1% 2018
HKG Hong Kong 382,782 5.7% 2016 59.6 6.3% FULL
BOM Mumbai 269,394 4.4% 2020 32.0 6.4% 2018
DEL Delhi 309,074 1.3% 2022 36.7 7.3% 2021
CGK Jakarta 398,985 4.9% 2021 60.1 4.1% FULL
NRT Narita 223,377 6.1% 2029 35.3 7.5% 2022
KUL Kuala Lumpur 326,678 15.3% 2023 47.5 19.1% 2022
MNL Manila 271,508 -0.6% 2019 32.9 3.1% 2015
SIN Singapore 346,796 6.0% 2018 53.7 5.0% 2018
ICN Incheon 273,866 6.8% 2022 41.7 6.4% 2015
BKK Bangkok 301,747 -4.8% 2023 51.4 -3.1% FULL
DXB Dubai 369,953 7.5% 2019 66.4 15.2% 2016
HAN Hanoi 89,835 6.6% NO DATA 12.8 13.1% FULL
IATA
Code Name
RUNWAYS
2013
Growth
Rate
Capacity
limit
reached
2013 Aircraft
Movements
2013
Passengers
in Millions
2013
Growth
Rate
TERMINAL
Capacity
limit
reached
Source: IATA/ACI
Source: Intervistas
Infrastructure essential to
unlocking the
‘Value of Aviation’
within the period of 2014-2035
REGULATIONS
ASEAN Single Aviation Market Visa Restrictions Aviation Security Fees and Charges
GROWTH OR GRIDLOCK?
THANK YOU