Catch up on CAPA’s exclusive Market Analysis pieces

    Each week, CAPA – Centre for Aviation, produces informative, thought provoking and detailed market analysis of the aviation industry. With supporting data included in every analysis, CAPA provides unrivalled and unparalleled intelligence.

    Singapore LCCs: Scoot’s fast growth, Jetstar Asia slows

    Scoot plans to pursue further rapid expansion over the next few years, resulting in significant market share gains in Singapore. The Singapore Airlines low cost subsidiary plans to grow its network to nearly 80 destinations by the end of 2020 and its fleet to 70 aircraft by the end of 2021.

    Scoot currently serves 65 destinations with a fleet of 45 aircraft. Scoot has a 14% share of seat capacity in Singapore and a 43% share of LCC capacity. Scoot is now more than twice the size of Singapore’s other local LCC, Jetstar Asia.

    Jetstar’s share of Singapore’s LCC market has shrunk from over 27% in 2010 – when it was as large as Scoot’s predecessor Tigerair – to less than 20% currently. Its market share will shrink further and could dip below 15% as Jetstar Asia has no plans to resume expansion, whereas Scoot is poised to grow by another 50% over the next few years. Scoot’s share of the total Singapore market will likely exceed 20% by 2022 but Jetstar’s share could shrink below 6%.

    To read on, visit Singapore LCCs: Scoot’s fast growth, Jetstar Asia slows

    Taxes just one of Latin American aviation’s hurdles to cross

    Latin America is arguably one of the most promising and most challenging aviation markets worldwide. The region’s overall low trips per capita, growing middle class and projected passenger growth have attracted a raft of new low cost start-ups, resulting in air travel becoming more affordable than ever.

    But the necessary infrastructure to support that growth is lacking, and the industry’s quest to convince governments that egregious taxes will stunt the industry’s growth is a slow journey that sometimes drifts sideways.

    During the past year there have been elections in some of Latin America’s largest aviation markets and there is hope that some of the new administrations will look favourably on the industry. However, Mexico recently encountered a major setback after voters endorsed a plan by its president-elect to scrap construction of a new airport in Mexico City.

    To read on, visit Taxes just one of Latin American aviation’s hurdles to cross

    U.S. Airport Privatisation programme expanded, regulations eased

    The U.S. Airport Privatisation Programme, framed in 1996 when the concept of privatisation of airport infrastructure there has lost its initial popularity from the 1960s, is widely regarded as out of date and unfit for purpose.

    Accordingly, the FAA reauthorisation bill which has just been passed has introduced the potential for any airport to be leased and for grants to be made available to individual airport-owning authorities to investigate the potential for public-private deals, amongst other measures.

    But the crucial capability of a single airline to veto a deal has been retained.

    To read on, visit U.S. Airport Privatisation programme expanded, regulations eased

    EasyJet SWOT: from green to amber for Europe’s orange airline

    EasyJet gained a new CEO, Johan Lundgren, on 1-Dec-2017. His arrival coincided with a green light for profit recovery: FY2018 results (year to Sep-2018) reversed the slide in underlying margins and return on capital that had overshadowed the previous two years. Trends in margins and return on capital tend to follow easyJet’s revenue per seat, which grew in FY2018 after two years of declines.

    Mr Lundgren knows, from his previous career in the travel and tourism industry, the importance of the customer experience and ancillary services in differentiating a business from its competitors and the importance of a digital strategy in supporting this. He wants easyJet to become the most data-driven airline in the world, building on the airline’s already strong tradition in digital developments. EasyJet also benefits from a strong primary airport network.

    Nevertheless, for low cost airlines, the price-driven commoditised end of the market is never far away, particularly in a period of increasing capacity growth. EasyJet expects revenue per seat to fall in 1H2019 – possibly a change from green to amber for continued margin improvement. Amber is not easyJet’s favourite shade of orange.

    To read on, visit EasyJet SWOT: from green to amber for Europe’s orange airline