Jetrader - Spring 2017 - 21
"Cost reduction does not come down to
four or five things, it comes down to four
or five hundred or thousand things," Cowen
said. "It's about finding cost reductions
at all levels of the business and avoiding
The region's growth also correlates with
steeper competition, and both PAL and HK
Express have made efforts to secure strong
holds within the industry.
Reid believes "the ongoing investments
in routes, aircraft, people and product"
have contributed to PAL's 75-year success
despite fluctuations and challenges.
"PAL has to compete with very efficient
LCCs on the short haul and is surrounded
by the top 5-star airlines in the world on
regional and long-haul routes. Being surrounded by strong competitors means you
cannot relax and forces you to keep your
effort up. PAL has always been dealing with
that and is all the better for it."
PAL being the Philippines' flag carrier
contributes to the airline's success over
competitors, and HK Express experiences
similar market superiority due to its home
base of Hong Kong.
"The metropolitan area of Hong Kong
and the other side of the border now have
a higher population density than Tokyo,"
Cowen said. "There's a lot of infrastructure development going on to build a ring
around Hong Kong to connect it to nearby
cities, which would make two-three hour
drive time between cities."
Beyond its regional advantage, HK
Express also implements "strategies that
tap into the demand of so many people wanting to travel and to anticipate
growth," Cowen said.
"Ultimately, low fares and good customer
service are our core value," Cowen said.
"The key word is the 'and' - and to provide
both low fares and good customer service
as well without compromising the other.
We think, 'What's not to like?'"
Both airlines have taken advantage of
cooperating with other entities to grow
as well. In order to meet a goal set by
President and COO James Bautista for PAL
to become a five-star airline in five years,
PAL has begun working with UK airline and
airport consultancy organization Skytrax.
"This collaboration involves a comprehensive program with our people and our
systems to improve the service at every passenger touch point from check-in to cabin
service to after flight," Reid said. Reid also
said the reconfiguration of PAL's fleet will
help realize their five-year, five-star goal.
"There is a major investment to reconfigure our A330s for long-haul routes with
more space in economy including imbedded
IFE, lie-flat business class and the introduction of a specialized premium economy
seat," Reid said. "In 2017 we are introducing next generation Q400 turboprops on
the domestic network, and in 2018 will
see us take delivery of our state-of-the-art
A350-900, which will allow us to fly JFKManila non-stop."
HK Express has taken an innovative
approach to collaborating with other
LCCs in the Asia-Pacific region with the
formation of the U-FLY Alliance, which
was formed in January 2016 and includes
such founding members airlines as Eastar
Jet, Lucky Air, Urumqi Air, West Air and
"Since HK Express converted to LCC
relatively late, it was a challenge of how
could we secure a market position and
compete reasonably with airlines such as
AirAsia," Cowen said. "We looked at establishing joint ventures that other airlines
had formed. Setting up a joint venture
can cause losses. So, the question was,
'How do we grow, then?' We looked at
opportunities and looked at independent
LCCs across the world. By establishing
an alliance, what each airline achieves
is an enhanced network that we could
not achieve individually. We also set a
greater set of destinations that we could
not sensibly achieve on our own and on a
shorter time scale."
Both PAL and HK Express recognize the
occurrence of accidents and crashes in
the region. From the Indonesia AirAsia
flight 8501 crash into the Java Sea in
2014 to the TransAsia Airways Flight 235
crash in 2015 that contributed to the
airline's recent suspension of operations
in late 2016, such accidents contribute
to decreased faith in safety among AsiaPacific airlines.
"There is a saying in the industry that
safety is no accident," Reid said. "PAL
has survived 75 years by paying attention to safety every day of every year,
and our young fleet with an average of
four-year-old aircraft is also a major contributor to the reliability and safety of
Cohen also recognizes the factor of
human error in accidents, which are often
the primary cause of such tragedies. HK
Express also aims to meet benchmarks set
by external analysis and appraisals.
"We seek continuous improvement to
make ourselves as safe as possible," Cowen
said. "We conduct regular safety exercises
to test our processes and train our staff
to identify weaknesses and put ourselves
under external scrutiny as part of our safety
rigor. HK Express is absolutely committed to reducing the chance of an incident
crystallizing into an event - safety is our
The Asia-Pacific region soon may be
reaching a peak, but commitments to innovation, resiliency and safety from airlines
such as PAL and HK Express will assist in
realizing a long-term safety net for the
region and the industry as a whole.
Jetrader * Spring 2017 21