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.


    Low cost long haul: Norwegian Air drops world’s longest LCC route 

    Norwegian is suspending services between London Gatwick and Singapore, which is currently the longest LCC route in the world. The decision to suspend London-Singapore after only a year operating the route highlights the challenges of true long haul operations for LCCs.

    It can be difficult for LCCs to achieve a sufficient enough cost advantage compared to FSCs on routes of more than 12 hours, particularly in a high oil price environment. The Singapore-London market – and the broader Southeast Asia-Europe market – is intensely competitive, with several airlines offering aggressively priced one-stop options.

    The Europe-North America market, which is generally higher yielding and cheaper to operate because of the shorter length of flight, is more attractive to Norwegian than Europe-Asia. Norwegian also now has new opportunities in the Europe-South America market following the upcoming launch of its new Argentina-based subsidiary, which makes Latin America more strategically important for Norwegian than Asia.

    To read on, visit Low cost long haul: Norwegian Air drops world’s longest LCC route 


    Thai Lion Air SWOT: domestic and China networks are major strengths 

    Thai Lion Air has expanded rapidly since launching services in Dec-2013. Thai Lion will end 2018 with a fleet of 35 aircraft and more than 10 million annual passengers, making it a relatively large airline after only five years.

    Thai Lion has already overtaken Nok Air, which launched operations nearly a decade earlier, to become the second largest LCC in Thailand. It has also overtaken Bangkok Airways to become Thailand’s third largest airline overall after Thai Airways and Thai AirAsia.

    Thai Lion is particularly strong in the Thailand domestic market and China, where it has become the largest Southeast Asian airline, and has been pursuing rapid international expansion over the past two years. Its international network is expected to reach 30 destinations and 11 countries by the end of 2018.

    To read on, visit Thai Lion Air SWOT: domestic and China networks are major strengths 


    Moscow Vnukovo: Moscow’s fastest growing airport courts Qatar Airways

    Moscow Vnukovo is the Russian capital’s fastest growing airport. Annual passenger numbers increased by 30% in 2017 and 20% in 1H2018. The FIFA World Cup had a positive impact on traffic from mid Jun-2018 to mid Jul-2018, but the underlying story for Russia’s leading low cost airport is one of strong growth, regardless.

    Unlike Sheremetyevo and Domodedovo, Moscow’s third biggest airport does not have one airline that is the clear leader by seat capacity. Rather, Vnukovo is an important base for three airlines with distinct positions. It is the biggest base for UTair Aviation, Russia’s third largest airline and Pobeda, Russia’s only LCC, and the second biggest base for Rossiya, the regional airline of the Aeroflot Group. The airport’s fourth biggest operator, RusLine, switched to Vnukovo from Domodedovo in Mar-2018.

    The airport has a domestic focus, but it is attracting attention from the global superconnectors. Already the Moscow base of Turkish Airlines, the airport signed an MoU with Qatar Airways in Apr-2018 that could pave the way for the Doha-based airline to acquire a 25% stake in Vnukovo. Qatar Airways operates to rival Domodedovo, but is expected to switch to Vnukovo once due diligence is completed.

    To read on, visit Moscow Vnukovo: Moscow’s fastest growing airport courts Qatar Airways


    Azul Airlines: attracted to Embraer E2s to replace E1s

    Brazil’s third largest airline, Azul, has made significant changes to its fleet during the past few years, ranging from the introduction of Airbus A330 widebodies to the latest generation Airbus narrowbody – the A320neo.

    More recently, the airline has been working to shed its older, more encumbered Embraer E-Jets, and in Jul-2018 it signed a letter of intent for an additional 21 Embraer E2 jets. Now Azul aims to shed its older E-195 E1 jets by 2021.

    The plan to accelerate the exit of E1s from Azul’s fleet was driven in part by financing arrangements for those jets (forged during the company’s start-up phase) that are unfavourable now that Azul is celebrating a decade of service in 2018.

    To read on, visit Azul Airlines: attracted to Embraer E2s to replace E1s