CAPA – Centre for Aviation, is the world’s most trusted source of market intelligence for the aviation and travel industry. It is always incredibly interesting to see what peaker our members and readers interest throughout the year.
Below is a snapshot of the top 5 most popular CAPA analysis pieces published in 2018:
Singapore Airlines A350-900ULR creates premium economy glut
Singapore Airlines (SIA) is slated to receive within the next few days its seventh and final A350-900ULR, completing a dramatic expansion phase which has enabled the airline to expand its presence in the US market significantly and rapidly. All seven aircraft, which are in a low density configuration with 94 premium economy and 67 business class seats, have been delivered in a period of less than three months.
SIA has used the new A350-900ULR fleet to launch 20 nonstop weekly flights to the US, generating 1,880 weekly one-way premium economy seats and 1,340 weekly one-way business class seats. The premium economy capacity is remarkable, given that premium economy is usually a niche product with 20 to 40 seats per aircraft.
Singapore Airlines has offered extremely low premium economy fares between Southeast Asia and the US since opening sales of the 20 flights several months ago.
The fares are significantly less than SIA’s lowest premium economy fares in shorter long haul, and even medium haul, markets. In many cases SIA is offering cheaper premium economy fares than regular economy fares on the same routes for the same dates of travel – an unsustainable scenario that could lead to adjustments in SIA’s A350-900ULR operation as early as next year.
To read the full article, visit Singapore Airlines A350-900ULR creates premium economy glut
HNA considers selling Hong Kong Airlines: investors may be shy
A few years ago any discussion of an airline being for sale was almost always inevitably linked to Etihad Airways and HNA evaluating a purchase. Etihad has halted expansion of its equity network, while HNA is going further and evaluating opportunities to sell assets. This includes Hong Kong Airlines, one of the flagship units in the group.
There is speculation that HNA has too much pride to sell Hong Kong Airlines, unless for an exceptional price. Then again, selling Hong Kong Airlines could be easier: unlike HNA’s airlines in mainland China, Hong Kong Airlines has no government ownership, and the local market has a more open regulatory environment. But more pragmatically, HNA has non-aviation assets that are not core to its business, and could fetch a higher price.
Hong Kong Airlines is in the midst of a significant expansion period defined by A350 services to North America and soon A330s to continental Europe. This plan will be tested against the airline’s lack of a strong connecting market.
Hong Kong Airlines has not yet captured significant corporate traffic, so its mostly leisure focus may be challenged by rising fuel prices. Although a sale appears difficult, independence would allow Hong Kong Airlines to grow strategically. The Hong Kong aviation hub is rapidly changing as Cathay Pacific restructures and seeks to regain the initiative.
To read on, visit HNA considers selling Hong Kong Airlines: investors may be shy
Europe’s Top 20 airline groups by passengers 2017; Lufthansa wrests top spot from Ryanair
In 2017 the Lufthansa Group has reclaimed from Ryanair the title of Europe’s biggest airline group by passenger numbers.
Lufthansa’s 18.6% increase, to 130 million passengers, was fuelled by its Jan-2017 acquisition of Brussels Airlines and strong growth by Eurowings (which benefited from airberlin’s demise). Wizz Air was the fastest-growing among the top 20 groups, followed by a resurgent TAP Air Portugal.
Ryanair (whose growth is, by contrast with Lufthansa’s, organic) would have kept the number one position – won for the first time in 2016 – if it had not trimmed its winter growth to address operational problems. Even then, the Irish LCC still grew at 10.3%, to 128.8 million passengers, and comfortably remained Europe’s biggest individual airline.
IAG remained third among airline groups, growing by 4.1% to 104.8 million passengers, and Air France-KLM retained fourth position, with 98.7 million – an increase of 5.7%. The next three groups – the LCC easyJet (81.6 million passengers, up 9.6%), Turkish Airlines (68.6 million, up 9.3%) and Aeroflot Group (estimated 50 million, up 16%) – also held their 2016 positions, completing a top seven that is still some way ahead of the rest.
This CAPA report ranks Europe’s top 20 airline groups by passenger numbers in 2017, and also includes a ranking of the top 20 individual airline brands.
US Big 3 global airlines’ fleets: nuanced changes
The large three US global network airlines have solid order books and their fleet plans are largely firmed up for the foreseeable future. But there are shifts occurring as American, Delta and United make subtle adjustments in order to ensure their fleets are sized appropriately.
American has cancelled an order for Airbus widebodies and deferred deliveries of narrowbody jets, while ordering some replacement regional jets. Delta is in the process of replacing a portion of its mainline fleet with new build aircraft, even as it has historically been a big player in the used aircraft market. United has also ordered regional jets and additional widebodies, and is also actively looking for used aircraft.
All of these moves show that fleet management is a science; airlines are constantly reviewing their fleet plans and making nuanced changes to their aircraft portfolios in order to strike the right cost and revenue balance.
To read on, visit US Big 3 global airlines’ fleets: nuanced changes
Brexit and aviation: UK airline access to EU markets to diminish, as airlines prepare for the worst
In spite of UK Transport Secretary Chris Grayling’s continued assertion that he will seek “the best possible access to European markets” for UK airlines, this access is increasingly likely to be less liberal than now. The European Commission has made it clear that the UK will leave the single aviation market when it leaves the EU, possibly after a limited transition period yet to be agreed.
Future UK-EU traffic rights are likely to be governed by a new bilateral similar to the EU-US and EU-Canada deals. The UK’s participation in EU deals with third countries will also cease, but Mr Grayling is confident that the UK can replace them with new bilaterals (although these seem unlikely to give UK airlines the right, for example, to fly to the US from elsewhere in Europe).
Meanwhile, Ryanair has warned that the UK government is underestimating the likelihood of flight disruptions to/from the UK. It has followed Wizz Air in applying for a UK AOC as a contingency. EasyJet is setting up a new UK subsidiary alongside the European one established in 2017 in an effort to be both a UK and an EU operator.
Little more than 13 months before the UK’s departure, clarity is needed urgently.