China Aviation New Infrastructure Development Online Summit民航新基建2020
Fri, 17 Apr 2020 1400 – 1700 hrs
The Covid-19 crisis has swept through the world and dealt a devastating blow to the global aviation economies. Leading companies in China’s aviation industry have band together to organize an online summit to discuss Aviation New Infra Development in China. This online summit held on Fri, 17 Apr 2020 was organized by the China Aviation Resources Network, FTS and TD Link. This report aims to summarize the key takeaways from each key speaker in English for the benefit of those who were unable to attend.
- Xiao Quan Wu 肖铨武
Director of Big Data Solutions, Trip.com Group 携程大数据委员会主席
- Ctrip (now rebranded Trip.com) is a Nasdaq listed, number one OTA
- (Online Travel Agency) in China. Its subsidiaries includes Ctrip.com (China), Trip.com (Global), Skyscanner (Global) and MakeMyTrip (India).
- com GMV (Gross Merchandize Value) exceeds Booking.com and Expedia in 2018.
- In 2019, Trip.com mobile bookings for Domestic China market is 85.3% and for Global market takes up 79.2% (mobile economy).
- com uses Big Data for personalization: to recommend other products with flight bookings eg. Hotel promotion, airport pickup/transfer or shopping promotion.
- com big data can help airlines to perform more targeted marketing (as much as 10% improvement): identifying leads and opportunities, lock key customer groups, diverse marketing channels and results feedback. Also useful for analysis of opening new markets and flight Air routes
- Airports can also use data to plan flight routes, demographics, capacity, operations etc
- They have established an Open Data Platform: FlightAI – opening API to partners like airlines, airports and other partners
Datasets include Regional Market Structure, Customer Demographics, Market Trends and Market Strategies
- Ctrip did a survey in 2018 and 98% of users surveyed would like to be able to use their phone on flight. 92% highly desires Inflight WiFi to be on the flight (Note: to common air travelers, inflight WiFi = WiFi + Internet)
- Mr Xiao felt that Inflight WiFi can increase the ancillary potential for airlines, especially when operation condition is becoming more challenging. com sees Inflight WiFi as a great retailing opportunity to more precisely target and recommend travel products to passengers, thereby significantly increasing ancillary revenue potential to airlines.
- Smaller or regional airlines may not have the resources or experiences to conduct full digitalisation of airlines. Mr Xiao recommended breaking down the tasks to smaller phases and Trip.com are most happy to share its experience and expertise to help smaller airlines.
- com is the latest new strategic investor to FTS and the interesting prospect of integrating their Big Data platform with inflight data analytics open up exciting new opportunities for airlines and partners.
2. Zhang Chi 张弛
General Manager, Air Contech (China Eastern Airlines and China Telecom Joint Venture) 空地互联网络科技股份有限公司（chou）总经理
- Traveling is becoming more mainstream and affordable and China travellers becoming younger and more demanding. The young consumers are placing more emphasis on personalisation, differentiation, comfort and quality.
- Airlines need new products and business model to meet the post-Covid era and satisfy the new generation of customers
- Drawing analogy with the post-2008 financial crisis era, Zhang noted that US airlines had gone through a stage of consolidation (through M&A), digitalisation, rapid development of Ancillary products (higher contribution) and airline services become more personalized.
- In the Post 2008 Financial Crisis era, the Inflight Internet in US developed tremendously albeit it started with ATG with very narrow bandwidth. However, Ku and Ka satcom is now catching up and taking up more market share.
- US inflight internet market is matured with several major players like Gogo, PAC, Viasat, GEE. Anyone of them can provide clear path for airlines to realize Inflight Internet but this is not the case in China
- Inflight Internet in China is a blue ocean. Compared to US, Europe, China market is still untapped. “I see no reason in 3-5 years time, China Inflight Internet still stagnate at today’s level.” Said Mr Zhang. The use of Mobile Phone is already allowed on the flight and there is strong support and endorsement from Chinese government.
- There are also increasing infrastructure investment from private and public funds in Satellite (Ka HTS) and Mobile Communications (5G), lowering airline investment and driving cost downwards.
- Mr Zhang remarked that during recent international flights, there were less aircraft flying so satellite resource was freed up. As a result, China Eastern is seeing more than 50% utilization (between 120 to 130 users).
- Zhang mentioned 3 factors to the success of China’s Inflight Internet
- Critical mass of at least 1000 connected aircraft
- Satellite bandwidth capacity and coverage to satisfy those critical mass of aircraft
- Cost of Inflight Internet affordable to users and no more price barrier
- China Inflight Internet industry is fragmented with many different players. However there is no one single player that can fully integrate up and downstream to provide a one-stop solution. There are weaknesses with each player at every node in the value chain.
- Zhang would like to see the various players collaborate to iron out differences and work on a seamless one-stop solution.
- In terms of business models, while China Eastern has over 90 aircraft, the bandwidth constraint has limited imagination and full development of its potential.
- China Easter’s Inflight Internet analytics revealed that 70% of traffic is used on Wechat 微信 and 80% of that Wechat traffic is browsing Friend Circle 朋友圈. Passengers’ main inflight gripe is to pass time.
- Inflight Connectivity is the first step to solving the passenger problem and digitalization of aircraft.
- When asked about potential collaboration models for Inflight Internet, Zhang said the company needs to be clear what role and strength it plays in the value chain and what it can bring to the table. This would determine the collaboration model in the chain.
- When China Eastern Airlines (CEA) was making the investment in Infight Internet, top management already decided Inflight Internet as indispensable part of airline’s branding, service and operations, and to differentiate itself from competition. CEA job is only starting and needs to invest more effort into polishing Inflight Internet as a product and not mere a connectivity pipe.
- Zhang predicted there will be rapid development in Ancillary revenue services in the post-Covid era: reduction of legacy services, development of more personalized services that are more precise and targeted.
3. Tan Ke Jian 谭克坚
Assistant General Manager, China Aviation Supplies Holding Company 中国航空器材集团有限公司总经理助理
- The Covid crisis has accelerated the digital transformation of China in overcoming the challenges with new technologies such as AI, Online IT, Mobile, 5G, e-government etc. The New Infrastructure Development (新基建) initiative is to spearhead digitalisation of conventional industries such as aviation.
- On 24 Dec 2019, CAAC led an aviation industry consortium of 72 entities to push for establishment of common big data platform, integrating airport, flights, aircraft, equipment and spares etc.
- Air-ground connectivity is the last-mile of the data sharing platform and the vital last piece to complete the puzzle.
- As of 1Q 2020, there are around 190 aircraft with satcom connectivity, representing just 5% of China’s 3800 fleet of aircraft, mostly all are widebody aircraft with China Eastern fleet forming the majority. He predicted that in next few years, the narrowbody will also be installing Inflight Connectivity systems.
- CASC is fully committed to digital aircraft transformation in 4 directions:
- Real time data sharing (requires air-ground broadband connectivity)
- Big data analysis
- AI and Machine deep learning
- Global collaboration and optimization
The benefits realized are: better decision making, safety, higher productivity, cost reduction, improvement of service
- For engine management, CASC is already using Block Chain technology to manage the life-cycle and supply value chain of aircraft engines and parts.
- CASC is looking to leverage on the broadband aircraft-ground satellite connectivity to develop nexgen EFB (Electronic Flight Bag) and EMB (Electronic Maintenance Bag) applications
- Mr Tan is looking forward to the broadband satcom connectivity in Qingdao Airline to accelerate and realize all these nexgen applications. He believed that the availability of realtime data from aircraft will enable CASC to provide a one stop platform for managing high value aircraft assets.
4. Wu Guang Hui 吴光辉 (KEYNOTE VIP SPEAKER)
Deputy General Manager/ Chief Scientist of COMAC 中国商用飞机公司副总经理兼首席科学家
Fellow, China Engineering Academy 中国工程院院士
- COMAC’s corporate mission has 4 key driving initiatives:
- Development of fundamental science and technologies
- Aviation industries development
- Regional economic development
- National economic development
- Wu went on to introduce the current aircraft models and long-term planning by COMAC
Wu summarized the delivery status of the various aircraft models:
- ARJ21 has orders of 654 to be delivered to 25 customers (China, SE Asia and Africa regions)
- C919 has orders of 835 to be delivered to 29 customers, starting from China Eastern Airlines (123air) in 2021
- C929 is aiming to sign the first order in this year 2020.
COMAC is taking a lead in adopting 5G in Civil Aircraft Manufacturing. Wu hopes to see the full integration of 5G ground mobile network with the aircraft Ka-HTS satellite as one seamless data network, thereby improving flight ops, safety and passenger service.
- While some airports are already installing AEROMACS ground WiFi, he also sees highspeed 5G mobile network coexisting with the airport WiFi. All these should be interconnected with the aircraft-ground satellite network
- The Covid-19 crisis has a devastating impact to global aviation industry:
The impact of this crisis has prompted COMAC to look into new areas like:
- Ensuring well-being of passengers and preventing cross-infection in cabin
- Disinfection methods of aircraft cabin
- Cabin air quality monitoring and purifying
- Aircraft fittings for transport of people and equipment to/from infected regions
To overcome the current crisis, the following measures need to be in place:
- Cross boundary international collaboration and sharing between countries
- Strong support package and fund support from governments
- Aviation industries huddling up to share, collaborate, support each other
- Airlines focus on developing cargo/freighter flights to support logistics and supply chains in war against virus
In spite of the challenging conditions, COMAC has set the targets to meet for 2021:
- Delivery of 100 ARJ-21
- TC and delivery of first C919
- Commence production of C929
When answering question from viewer, he replied that COMAC has long embraced digitalisation technology from the very start. The entire C919 aircraft was fully designed “paperless” in digital domain. COMAC has also deployed 5G applications to manage parts and inventory, improving productivity and reducing cost by 20%.
Wu believed that aircraft-ground broadband connectivity will greatly enhance safety, flight monitoring, pilot decision making, as well as optimize cost and improve aircraft reliability. Current flight plan is still very much based on ground pre-planning. In future, it will be augmented by Beidou Satellite Nav Data and realtime aircraft data feeds from inflight connectivity.
END OF REPORT
Translated and reported by: Darrel Chua