1. © PATA 1 1

2. ….“Thin routes over long distances linking least developed countries requires specific and different solutions.”
George Faktaufon – ASPA Director General

3. …. Air Travel is more affordable and connects more people and places globally than ever before…

4. Affordability, choice and value now plays a much greater role in the decision making process

6. Low Cost Carriers (LCC’s)

7. LCC Development Continue to see major route network expansions.
LCC’s have now entered the Long Haul arena.
Rapid development of secondary and third tier airports and infrastructure.
LCC’s offer greater consumer choice
Drive new business and grow regional economies
They have changes peoples expectations!

8. LCC’s – Creating New Travellers

9. 9

10. 10

11. Asian LCC’s
2014

14. Could we see LCC’s in the Pacific?
Limited international and regional access
Lack of frequency and capacity
Lack of critical mass, infrastructure and population
Huge geographical spread
Political instability
………..None of which suit a Low Cost Carrier

15. Capacity Purchase Agreements
C.P.A.
Capacity Purchase Agreements

16. What is a CPA Agreement?
CPA is the pooling of operations and purchasing capacity through a 3rd party without capital outlay
Routes are generally operated by efficient Regional Jet Aircraft or RJ’s (sub 120 seats)
Branding, schedules, sales & marketing can either be driven by existing carriers and/or via a single marketing body.. or both
Airport operations are handled by existing and expanding infrastructure
The operational risk falls to the company providing the capacity.

17. Regional CPA’s in the U.S.
Following 911 the USA has seen a shift in operating smaller RJ’s on regional point to point city pairs.
Regional services operated by RJ’s now account for over 40% of the total domestic fleets operated by legacy carriers but on Capacity Purchase Agreements (CPA’s)
As at May 2006

18. Regional CPA’s in the U.S.
Over 56% of all flights by U.S. legacy carriers are now flown by third-party CPA operators

20. Developing Regional Air Services
Over 56% of all flights by legacy carriers are flown by third-party CPA operators
From the number of flights operated by CPA carriers grew to an estimated 4.15 million schedules
In 2013 American Airlines signed a 12-year CPA with Republic Airways Holdings (RJET) to provide 63 regional jets
On 02’Feb’15, Chorus Aviation Inc. signed a new CPA with Air Canada to supply and operate regional services

21. Developing Regional Air Services

22. So could this work in the Micronesia?

23. CPA Regional Air Services
Operating smaller more efficient equipment allows better matching of frequency and capacity especially on regional routes.
The regional operational risk then falls to the company providing Capacity over Frequency

24. CPA Regional Air Services - Micronesia
In the Micronesia the carrier would be jointly owned by the member state nations.
This minimises risk, financial and otherwise, and supports the integrity of the carrier
Each nation would have their flag on the fuselage
The carrier would be operated by a third party specialist company supplying equipment, crew and technical svcs
The cabin would be divided between a host of carriers /nations responsible for a % of the load
Each carrier/nation pays a % share of the operating costs

25. …….So could this work in the Pacific?

26. Current Pacific Regional Air Services
203 Scheduled routes
(aircraft above 30 seats)
122 Domestic city pairs
35 Regional city pairs
81 Regional city pairs
including Aus. and NZ
Average sector distance
of 590 NM / 1090 km
Average frequency of
4 flights/week
3,470 NM / 6,420 km
1,485 NM / 2,750 km
4,320 NM / 8,000 km

27. The Pacific
……..Single carrier sectors play a major part in Pacific aviation.
Number of Airlines Serving Route

28. Wide seat capacity gap in the South Pacific
B737
B737
B767
A330
Fiji TP
French
Polynesia
A340
328Jet TP
New
Caledonia
A320
A330 TP
Regional Jet
B737
Vanuatu TP
B737
B737
Others TP
F100 25 50 75
100
125
150
175
200+
Seat Capacity
Source: BACK Associates Fleet data,

29. …….So what’s the Pacific plan?

30. Re-defining the Network
Stage One: Establish first ‘Route centre:
Low cost carriers develop ‘route centres’ not hubs.

31. Stage One Sub Regional Operation
- Introduce 1 EMBRAER 170/175
- Rightsizing
- Frequency enhancement at
current destinations
HIR
APW
SUV
VLI
NAN
TBU

32. Re-defining the Network
Stage Two: Secondary ‘Route Centres’ may have locally based aircraft and crews

33. Stage Two
Expanding route network, and introducing other capitals as secondary route centres.
MAJ
- Introduce 5 EMBRAER
170/175
- Frequency enhancement
at existing destinations
- New sectors
TRW
INU
FUN
HIR
APW
VLI
NAN
SUV
IUE
TBU
RAR
NOU
BNE
SYD
AKL

34. Re-defining the Network
Stage Three: Additional route centres, with more frequencies and more direct flights, strengthen airline position in more destinations and protects the integrity of the schedules.

35. Stage Three EMBRAER 190/195 introduction - Introduce 4 EMBRAER 190/195
- Increase capacity at EMBRAER 170/175
routes
- Frequency enhancement at current
destinations
- New sectors
MAJ
TRW
INU
POM
FUN
HIR
HIR
WLS
APW
NAN
VLI
SUV
IUE
PPT
TBU
NOU
RAR
BNE
SYD
AKL
HLZ
PMR
WLG
CHC

36. Micronesia Expanding Route Network Stages

37. Developing CPA Regional Air Services
CPA operations minimises the risk for ALL stakeholders
Creates profitable regional air services
Dramatically improve regional access
Grow regional economies

38. Thank You
Chris Flynn
PATA
Regional Director - Pacific

39. Distances and ETOPs Saipan to… Embraer 170 Standard – 1800nm
Palau – 800nm
Pohnpei – 883nm
Marshall Islands – 1571nm
Embraer 170 Standard – 1800nm
Embraer 170 LR – 2100nm
ETOPS Compliant – (Extended-range Twin-engine Operational Performance Standards)

41. Micronesia Expanding Route Network Stages