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.

    US shutdown: headwinds for aviation and aerospace

    The partial government shutdown in the US is creating havoc across many industries, from the financial sector right through to small businesses operating near the country’s National Parks.

    The aviation industry is also facing pressure from the shutdown on numerous fronts – ranging from the high profile “blue flu” sick-ins from TSA workers to FAA safety inspectors suspending their oversight functions.

    Anecdotes from airlines are already emerging, including uncertainty in achieving ETOPS certification and delays in putting aircraft into service.

    The overall effects of the shutdown on the airline business are tough to predict, but the economic effects of a prolonged partial closure of the government will no doubt trickle down to many facets of the US’ aviation and aerospace industries.

    To read on, visit US shutdown: headwinds for aviation and aerospace

    Climate change: its impact on aviation. The time to plan is now.

    There is justifiably a good deal of analysis and media coverage of aviation’s impact on climate change.

    Fewer column inches have been given to the impact of climate change on aviation.

    The main expected impacts of climate change on aviation result from changes in temperature, precipitation (rain and snow), storm patterns, sea level and wind patterns. In addition, climate change is expected to lead to increased drought, impacts on the supply of water and energy, and changes in wildlife patterns and biodiversity. Consequences for aviation include reduced aircraft performance, changing demand patterns, potential damage to infrastructure, loss of capacity and schedule disruption.

    According to a late 2018 survey by EUROCONTROL, a large majority of European aviation industry respondents (86%) consider that actions to reduce the impacts of climate change on aviation may be necessary now or in the future. However, almost half (48%) have not begun planning for adapting to the impacts of climate change.

    There are strong operational, business and regulatory reasons for participants in the aviation industry to take steps to adapt to the impacts of climate change. As 2019 begins, a climate change risk assessment should be near the top of the list of New Year’s resolutions for aviation industry participants.

    To read on, visit Climate change: its impact on aviation. The time to plan is now.

    Amazon & Amazon Air: becoming an airline behemoth?

    As speculation over the choice of Amazon’s second headquarters held a major place in business headlines in 2018, Amazon continued to build up its air delivery operations through expanding its presence at various US airports and enlarging its fleet.

    Its good news for airports such as Fort Worth Alliance, Cincinnati and Rockford where Amazon plans to expand its presence, and for Air Transport Services Group, which is deepening its ties with the online retail giant.

    Since Amazon began operating its own delivery streams questions have grown about whether Amazon would affect the businesses of the cargo giants FedEx and UPS.

    Amazon’s ultimate impact on the market remains to be seen, given that it is in the early stages of building up its air operations. But recent developments show Amazon’s ambitions in cargo delivery appear to be growing.

    To read on, visit Amazon & Amazon Air: becoming an airline behemoth?

    LOT Polish Airlines SWOT: Central Europe’s favourite network airline

    LOT Polish Airlines turned 90 on 1-Jan-2019. In 2019 it expects to carry 10 million passengers for the first time – more than twice its traffic of just four years ago. Reaching these milestones underlines the success of its restructuring following a turbulent period in 2008 to 2015.

    LOT escaped the fate of some other Central European flag carriers (such as Malev, which went bust in 2012), but had to be rescued by a Polish government loan in 2012. This state aid was approved by the European Commission subject to a restructuring programme. Cost reductions, fleet modernisation and a network overhaul made LOT much more competitive, although it faces strong low cost competition on short haul.

    Being Central Europe’s only long haul operator of any significance, LOT has ambitions to be the region’s favourite network airline. Although Poland passed legislation allowing LOT’s privatisation as long ago as 2013, a private investor is no longer seen as imperative.

    Nevertheless, as a Star member, but too small to be in the inner circle of JV members, LOT could arguably benefit from closer links to an airline with greater financial and network reach.

    This report looks at LOT’s strengths, weaknesses, opportunities and threats.

    To read on, visit LOT Polish Airlines SWOT: Central Europe’s favourite network airline

    Cambodia: new airports needed for projected tourist boom

    France’s Vinci Airports has long had a connection with Cambodia through concessions at three of the main airports. Now the Cambodian Prime Minister, Hun Sen, has cast doubt on the efficacy of those airports, insisting that new ones need to be built, and one is actually underway.

    Hun Sen has stated that Cambodia’s existing three international airports are not expected to be able to accommodate traffic demand by 2025, with international passengers forecast to increase from six million to 12 million per annum. The vast majority of visitors are from China and neighbouring countries, with the U.S. providing the largest western contingent (257,000 in 2017, 4.6%).

    But the times are changing and now it seems as if it will be Chinese firms, rather than European ones, which will be at the forefront of the drive to improve Cambodia’s aviation infrastructure. In Dec-2016 the government selected China’s Yunnan Investment Holdings Limited as the principal developer of Siem Reap. (The government is required to compensate SCA, Société Concessionnaire de l’Aéroport, for ending its concession prematurely.)

    To read on, visit Cambodia: new airports needed for projected tourist boom

    Gatwick Airport “partnership” coup for Vinci. Now to maximise the asset

    Immediately following the Christmas vacation break in the U.S., UK and France, Vinci Airports announced plans to acquire a 50.01% majority freehold shareholding in London Gatwick Airport, the second busiest serving the UK capital and in the country.

    The aggressive Vinci Airports – one of the most significant airport operators in the world now – has long coveted a big primary European gateway airport like Gatwick and will surely be in the frame for the sale of the French government’s share in Groupe ADP in France where it is already a minor shareholder. Its busiest airport in Europe currently is Lisbon but its last deal was for the much smaller Belgrade Airport.

    But while most of the Gatwick indicators are positive, the big challenge for Vinci will be to achieve the upside it anticipates.

    To read on, visitGatwick Airport “partnership” coup for Vinci. Now to maximise the asset