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Korean Air and the Hanjin Group Chairman and founder of Skyteam died in Los Angeles

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Yang Ho Cho, 70, Chairman and CEO of Korean Air and the Hanjin Group, died peacefully April 7 in a Los Angeles hospital after a brief illness.  He was considered to be an Air transport pioneer.

Mr. Cho’s reach extended far beyond Asia.  He was a founder of the Skyteam international airline alliance and led the bid committee that took the 2018 Winter Olympics to Korea.  He recently completed development of the iconic Wilshire Grand complex in downtown Los Angeles, the tallest building west of the Mississippi.

He served on the Board of Governors of the International Air Transport Association (IATA); the Board of Trustees of his alma mater, University of Southern California; and has received honorary doctorate degrees from Embry Riddle Aeronautical University (Florida) and the Ukraine National Aviation University.

Under his guidance, Korean Air became a global powerhouse flying to 124 cities and 44 countries, emerging as America’s largest Asian airline with 15 North American gateways. He recently negotiated a joint venture with Atlanta-based Delta Air Lines, that created the industry’s most comprehensive transpacific network. The airlines are scheduled to launch a new non-stop route between Boston and Seoul on April 12.

Mr. Cho was in the airline industry all his life, as his father, Choong-Hoon Cho, had acquired and privatized Korean Air 50 years ago.  The younger Cho was named the airline’s Chairman and CEO in 1999 having served as President and CEO four years earlier. Mr. Cho began working for Korean Air as a manager in the Americas Regional Headquarters in Los Angeles in 1974 after graduating from the University of Southern California.

Three weeks ago Korean Air investors removed him from the board in a victory for shareholder activism.

Mr. Cho’s leadership has been widely recognized over the years. He was awarded the title of `Grand Officier’ in France’s Légion d’Honneur, ‘Polaris’ in Mongolia and also the `Mugunghwa Medal’ in Korea – all of which are the highest order of civil merit awarded in these countries.

In addition to his corporate responsibilities, Mr. Cho was vice chairman of the Federation of Korean Industries, co-chairman of the Korea-U.S. Business Council, and served as the co-president of l’Année France-Corée 2015-2016’, celebrating 130 years of diplomatic relations between Korea and France.

Mr. Cho is survived by his wife, Myung-hee Lee, son Walter, daughters Heather and Emily and five grandsons.  Services are pending in South Korea.

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IATA Report: Aviation continues to deliver solid

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The International Air Transport Association (IATA) announced global passenger traffic results for February 2019 showing total revenue passenger kilometers (RPKs) rose 5.3%, compared to February 2018. This was the slowest rate of growth in more than a year but still in line with long-term demand trends. Monthly capacity (available seat kilometers or ASKs) increased by 5.4%, and load factor slipped 0.1 percentage point to 80.6%, which is still high by historic standards.

“After January’s strong performance, we settled down a bit in February, in line with concerns about the broader economic outlook. Continuing trade tensions between the US and China, and unresolved uncertainty over Brexit are also weighing on the outlook for travel,” said Alexandre de Juniac, IATA’s Director General and CEO.

February 2019
(% year-on-year)		 World share1 RPK ASK PLF
(%-pt)2		 PLF
(level)3
Total Market 100.0% 5.3% 5.4% -0.1% 80.6%
Africa 2.1% 2.8% 1.1% 1.1% 70.4%
Asia Pacific 34.5% 6.3% 5.8% 0.4% 82.6%
Europe 26.7% 7.3% 7.7% -0.3% 81.5%
Latin America 5.1% 5.0% 5.5% -0.4% 81.3%
Middle East 9.2% -0.9% 2.7% -2.6% 72.6%
North America 22.4% 4.2% 3.9% 0.3% 80.8%

 

nternational Passenger Markets

February international passenger demand rose 4.6% compared to February 2018, which was a slowdown from 5.9% growth in January. Capacity climbed 5.1%, and load factor dropped 0.4 percentage point to 79.5%. Airlines in all regions but the Middle East showed traffic growth versus the year-ago period.

  • European carriers showed the strongest performance for a fifth consecutive month in February. Passenger demand increased by 7.6%, compared to a year ago, unchanged from January. Europe’s continuing strong performance provides a paradox given Brexit concerns and signs of a softer economic outlook. Capacity rose 8.0% and load factor slid 0.3 percentage point to 82.3%, which still was the highest among regions.
  • Asia-Pacific airlines’ February traffic rose 4.2% compared to the year-ago period, a substantial slowdown from the 7.2% increase recorded in January. The timing of the Lunar New Year holiday in the first week of February this year may have shifted some traffic to January. Capacity increased 4.7% and load factor dipped 0.3 percentage point to 81.0%.
  • Middle East carriers recorded a 0.8% traffic decline in February compared to a year ago, the only region to report a drop year-over-year. Capacity rose 2.9% and load factor fell 2.7 percentage points to 72.6%. Broadly speaking, passenger volumes of the region’s airlines have been moving sideways for the past 12 – 15 months.
  • North American airlines’ traffic climbed 4.2% in February, a decline from 5.4% growth in January. Capacity rose 2.9% and load factor was up 1.0 percentage point to 79.0%. Signs of softening economic activity at the end of 2018, in conjunction with the effects of ongoing tensions between the US and several of its trading partners, may be mitigated by the region’s low unemployment and generally sound economic backdrop.
  • Latin American airlines saw traffic rise 4.3% compared to February 2018, a slippage from 5.4% annual growth in January. Capacity increased by 5.6%, and load factor dropped 1.0 percentage point to 81.4%. Renewed economic and political uncertainties in a number of key countries may weigh upon air transport demand in coming months.
  • African airlines experienced a 2.5% rise in traffic for the month compared to the year-ago period, down from 5.1% growth in January. Concerns over conditions in the largest economies are contributing to the slowdown. Capacity rose 0.3%, and load factor climbed 1.5 percentage points to 69.7%.

Domestic Passenger Markets

Domestic travel demand rose 6.4% in February compared to February 2018, down from 7.4% annual growth in January. All markets except Australia reported increases in traffic, with India recording its 54th consecutive month of double-digit percentage growth. Domestic capacity climbed 5.8%, and load factor edged up 0.5 percentage point to 82.4%.

 

  • China topped the growth chart for a second month in a row, with RPKs up a strong 11.4% year-on-year, although this was down from 14.5% growth in January compared to a year ago.
  • Brazil’s domestic traffic increased 5.8% in February, compared to a year ago, the fastest pace in more than six months and more than double the 2.6% year-over-year rise for January. Brazil was the only domestic market tracked by IATA to show an increase in the year-on-year growth rate compared to January 2019.

The Bottom Line

“While overall economic confidence appears to be softening, aviation continues to deliver solid results, helping to sustain global commerce and the movement of people. The Brexit deadline has come and gone with no separation agreement, but with vital air connectivity between the UK and the Continent maintained for the present. Temporary measures, however, are no substitute for a comprehensive Brexit package that will ensure that the Business of Freedom is able to play its vital role in contributing to the well-being of the region—and the world,” said de Juniac.

Read the full February Passenger Traffic Analysis  (pdf)

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Air freight demand still spiraling down

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For the fourth consecutive month, global air freight performance has reported a negative year-on-year growth and the worst performance in the last three years. The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight ton kilometers (FTKs), decreased 4.7% in February 2019, compared to the same period in 2018.

Freight capacity, measured in available freight ton kilometers (AFTKs), rose by 2.7% year-on-year in February 2019. This was the twelfth month in a row that capacity growth outstripped demand growth.

Demand for air cargo continues to face significant headwinds:

  • Trade tensions weigh on the industry;
  • Global economic activity and consumer confidence have weakened;
  • And the Purchasing Managers Index (PMI) for manufacturing and export orders has indicated falling global export orders since September 2018.

“Cargo is in the doldrums with smaller volumes being shipped over the last four months than a year ago. And with order books weakening, consumer confidence deteriorating and trade tensions hanging over the industry, it is difficult to see an early turnaround. The industry is adapting to new markets for e-commerce and special cargo shipments. But the bigger challenge is trade is slowing. Governments need to realize the damage being done by protectionist measures. Nobody wins a trade war. We all do better when borders are open to people and to trade,” said Alexandre de Juniac, IATA’s Director General and CEO.

 

Regional Performance

All regions reported a contraction in year-on-year demand growth in February 2019 except for Latin America.

  • Asia-Pacific airlines saw demand for air freight contract by 11.6% in February 2019, compared to the same period in 2018. Weaker manufacturing conditions for exporters in the region, ongoing trade tensions and a slowing of the Chinese economy impacted the market. Capacity decreased by 3.7%.

 

  • North American airlines saw demand contract by 0.7% in February 2019, compared to the same period a year earlier. This was the first month of negative year-on-year growth recorded since mid-2016, reflecting the sharp fall in trade with China. North American carriers have benefited from the strength of the US economy and consumer spending over the past year. Capacity increased by 7.1%.

 

  • European airlines experienced a contraction in freight demand of 1.0% in February 2019 compared to a year ago. The decline is consistent with weaker manufacturing conditions for exporters in Germany, one of Europe’s major economies. Trade tensions and uncertainty over Brexit also contributed to a weakening in demand. Capacity increased by 4.0% year-on-year.

 

  • Middle Eastern airlines’ freight volumes contracted 1.6% in February 2019 compared to the year-ago period. Capacity increased by 3.1%. A clear downward trend in seasonally-adjusted international air cargo demand is now evident with weakening trade to/from North America contributing to the decrease.

 

  • Latin American airlines posted the fastest growth of any region in February 2019 versus last year with demand up 2.8%. Despite the economic uncertainty in the region, a number of key markets are performing strongly. Seasonally-adjusted international freight demand achieved growth for the first time in six months. Capacity increased by 14.1%.

 

  • African carriers saw freight demand decrease by 8.5% in February 2019, compared to the same month in 2018. Seasonally-adjusted international freight volumes are lower than their peak in mid-2017; despite this, they are still 25% higher than their most recent trough in late-2015. Capacity grew 6.8% year-on-year.

View full February freight results (pdf).

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Peacock Aviation taking legal action against Gambia carrier

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Nigerian Peacock Aviation company that worked as General Sales Agency (GSA) for the Gambian Mid Africa Aviation Company Ltd. that traded in Nigeria under the name Fly Mid Africa has petitioned the Gambian Government over the non-payment of passengers’ air ticket refunds before it exited Nigeria.

The petition which was dated February 12, 2019 and also copied to the Nigerian High Commission in the Gambia through its legal counsel Abrahams Ayobami  & Co. stated: “We are Solicitors to Peacock Aviation and Allied Services Ltd. [henceforth referred to as ‘Our Client’], a company duly registered under the Laws of the Federal Republic of Nigeria with its registered address situate at No. 19, Mojidi Street, Off Toyin Street, Ikeja, Lagos State, Nigeria and on its instructions and behalf we write you this petition.

“Our client was appointed the General Sales Agent [GSA] of ‘MID AFRICA AVIATION LTD’ trading under the name ‘FLY MID AFRICA’ on 24th April 2017 when the said company commenced its Airline operations in Nigeria.”

According to the counsel, “Our client, among other things was to manage and operate a city office to sell tickets to customers, a task our client was able to achieve within a record time of four weeks of operation.”

The petition stated further that, “Upon commencement of operations of the Airline, the cash sales in our client’s custody was used to take care of operation fees such as Air Landing, Parking Fees, Passengers’ Service Charges, Nigerian Civil Aviation Authority [NCAA] Fees, Catering, and Crew Hotel Accommodations.”

“With the above looking promising, the Airline ran into issues with their flight schedules which led to the cancellation of February and March 2018 flights and finally suspension of operations until further notice.”

While the suspension was still on, the airline got instructions to commence refund of issued tickets to customers which was carried out until exhaustion of all the funds at hand by the GSA according to its counsel.

“Our client then made a request for funds to be released to liquidate the outstanding refunds but same has remained hitherto unmet by the management of Fly Mid Africa Airlines for over one year now.”

The petition also has it that, there is still an outstanding refund of about Eleven million one hundred and fifty six thousand, six hundred and one naira fifty one kobo [₦11,156,601.51] and our client’s unpaid International Air Transport Association [IATA]/Billing Settlement Plan [BSP] Sales Overriding Commission of about Seven Million Naira [₦7,000,000] only with customers showing their grievances in all manners including laying siege to the GSA business premises and disrupting its activities.

Meanwhile, some have even threatened to commence legal actions against it; more so as customers are aware that tickets issued on the IATA BSP platform have been refunded and therefore query the reason for non-payment of their refunds.

Despite several email communications between our client and the said Fly Mid Africa Airline with reconciliation and adjustment of account settled between the parties, still the Airline has refused to release funds to pay innocent travelers their well-deserved refund even after leaving them stranded, disappointed and uncompensated, according to Chief Segun Phillips, Group Executive Chairman, Peacock Travels and Tours Limited.

However, in a bid to settle the matter amicably, the GSA wrote to the Nigerian High Commission in The Gambia to wade into the matter but was referred back to the Gambian Commission in Abuja as the right channel for resolving such issue.

As it stands, there is the total outstanding refund of about Eighteen million one hundred and fifty-six thousand six hundred and one naira fifty-one kobo [₦18,156,601.51] amounting to tickets refunds and GSA unpaid IATA BSP Sales Overriding.

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IATA announces judges for Diversity and Inclusion Awards

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The International Air Transport Association (IATA) announced the members of the independent judging panel for the IATA Diversity and Inclusion Awards as:

  • Angela Gittens, Director General, Airports Council International
  • Gloria Guevara, President and CEO, World Travel and Tourism Council
  • Mark Pilling, Vice President Publishing and Conferences, FlightGlobal
  • Karen Walker, Editor-in-Chief, Air Transport World

“We are honored to have such a renowned and diverse panel of experts as judges for the IATA Diversity and Inclusion Awards. Our aim is to inspire greater diversity and inclusion across the aviation industry by recognizing role models and company initiatives that are driving critical change,” said Alexandre de Juniac, IATA’s Director General and CEO.

IATA also announced the following important changes for nominations:

  • Eligibility: The Young High Flyer Award will be extended to nominations for women under the age of 40 (previously 30). This is to better accommodate the contributions made as nominees develop their careers and networks within the industry.
  • Deadline: The deadline for all nominations will be extended to 6 PM Central European Time, Monday, April 15. This will ensure ample time for any new nominations as a result of the category criteria adjustments.

Sponsored by Qatar Airways, the IATA Diversity and Inclusion Awards will honor excellence demonstrated in the categories of: (1) Inspirational Role Model, (2) Young High Flyer and (3) Diversity and Inclusion Team. The first awards will be presented at the conclusion of the 75th IATA Annual General Meeting and World Air Transport Summit to be held in Seoul, South Korea (1-3 June 2019).

For more information on the Awards visit the webpage.

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