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    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.


    Mach’s surprise bid for Air Transat, topping Air Canada

    Canadian aviation has been a hotbed of activity during the past few weeks; the country’s two largest airlines have announced major transactions they believe will better position themselves for the future.

    Onex plans to purchase WestJet for CAD5 billion and take the airline private, and Air Canada is moving closer to wrapping up due diligence for its proposed CAD520 million acquisition of Transat.

    But a Quebec real estate developer, Mach, has now entered the bidding for Transat with a higher price than Air Canada’s initial offer. Mach’s decision to pursue Transat occurs as speculation grows about whether regulators would approve Air Canada’s purchase of Transat, given the concentration the two airlines would create in some international markets from Canada.

    As the period of exclusivity for negotiations between Air Canada and Transat nears its end, Air Canada needs to decide if upping its offer for Transat is key for execution of its long term plan to maintain its competitive position in Canada’s aviation market.

    To read on, visit Mach’s surprise bid for Air Transat, topping Air Canada


    Basic economy fares: Alaska Air benefits; Hawaiian launches

    Fare segmentation is now part of the business strategy for most of the large US airlines. Alaska has launched its “Saver Fares”, and Hawaiian is preparing to debut “Main Cabin Basic” in the face of growing competitive pressure in its markets from Hawaii to the US west coast.

    Alaska has stated that the roll-out of its Saver Fares has exceeded expectations and it expects to generate USD100 million in incremental revenue from segmentation this year.

    Hawaiian, also, has outlined its revenue expectations from fare segmentation and its estimates reflect the size and scope of its operations.

    As segmented fares reach a certain level of maturity, airlines will work to add more sophistication into how they revenue manage their fare tiers, and Alaska seems interested in ways to do that once its gains more familiarity with managing its Saver Fares.

    To read on, visit Basic economy fares: Alaska Air benefits; Hawaiian launches


    Brazilian aviation: Avianca Brazil’s decline; assets for grabs

    There is no doubt that the shrinking of Avianca Brazil has altered market dynamics in Brazil’s domestic market, and the country’s three largest airlines believe Avianca Brazil’s bankruptcy will create opportunities for the country’s remaining carriers.

    GOL, LATAM Airlines Brazil and Azul have all been vying for Avianca Brazil’s assets but the government suspended an asset auction, including airport slots, and now the fate of Avianca Brazil is anyone’s guess. While the government drags its feet on rescheduling an auction or some other form of asset dispersal, Avianca Brazil continues to languish with Brazilian operators suspending the airline’s operations.

    As the uncertainty over the fate of Avianca Brazil shows no signs of disappearing in the near future, Brazil’s airlines maintain a reasonably positive view of the domestic market, despite headwinds created by rising fuel prices and currency devaluation.

    To read on, visit Brazilian aviation: Avianca Brazil’s decline; assets for grabs


    Turkey-NE Asia aviation: underserved market growth potential

    A member of the Turkish Grand National Assembly has said that Turkey is seeking direct air services from Japan and China to Nevşehir Kapadokya Airport. According to OAG data, Nevşehir Kapadokya is Turkey’s 27th largest airport by seat capacity in the week of 27-May-2019 and is served by only two domestic routes to/from the two Istanbul airports.

    The ambition to bring direct flights from the two largest aviation markets in North East Asia to a small regional airport in the centre of Turkey is notable. This is particularly so since there are currently no services from any country in North East Asia to any Turkish airport other than Istanbul. Moreover, North East Asia, the world’s second largest region for international seats, ranks as only seventh by capacity to/from Turkey.

    Turkish Airlines is comfortably the biggest airline by seats between Turkey and North East Asia, with a monopoly to Japan, Taiwan and Hong Kong. It is not expanding this summer, but plans future growth in Japan and China. Competitor activity is stimulating growth in summer 2019 in China and South Korea (the two largest Turkey-North East Asia markets).

    Nevertheless, this market region seems underserved.

    To read on, visit Turkey-NE Asia aviation: underserved market growth potential


    Korean Air new chief Walter Cho in spotlight as Seoul hosts IATA AGM

    Korean Air is in the spotlight as it hosts the 2019 IATA AGM for the first time. The airline’s main shareholder, the Cho family, has been embroiled in multiple scandals in recent years and its patriarch, Cho Yang-ho, was facing embezzlement charges when he passed away in Apr-2019. This year’s AGM provides an opportunity to remember Mr Cho and also marks the start of a new chapter for Korean Air.

    Cho Won-tae, a.k.a. Walter Cho, has taken over as Korean Air’s chairman and CEO. He also has been appointed co-CEO of Hanjin Group. Hanjin is a large conglomerate that includes Korean Air and Hanjin Travel, one of South Korea’s largest travel agencies. Hanjin and the Cho family hold a 33% stake in publicly listed Korean Air.

    The younger Mr Cho, 43, was already Korean Air’s president and a board member. He has been the heir apparent for some time, having worked his way up Korean Air’s management ranks, including stints managing the passenger and cargo divisions before taking over as president in Mar-2016. Mr Cho also became chairman of the SkyTeam Alliance on 1-Jun-2019.

    Below are Walter Cho’s statements from a round table discussion with selected media, including CAPA, that took place in Oct-2018 during the AAPA Assembly of Presidents in Jeju. Mr Cho’s replies provide a glimpse into his strategy and plans for South Korea’s largest airline group.

    To read on, visit Korean Air new chief Walter Cho in spotlight as Seoul hosts IATA AGM