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.


    Air France Joon in Latin America: now Quito flights

    Quito is gaining access to a third European capital in 2019 when Air France’s subsidiary Joon launches flights to Ecuador’s capital from Paris. Mariscal Sucre airport’s other European destinations include KLM’s service to Amsterdam and flights offered by Iberia and Air Europa to Madrid.

    With the launch of flights to Quito, Joon’s network in Latin America and the Caribbean will grow to three destinations. Quito is joining the airline’s existing service from Paris to St Maarten and Fortaleza in Brazil.

    Quito is an interesting choice for Joon, but similarly to its position in the St Maarten and Fortaleza markets, the airline will face no competition on the new service. It’s a win for Ecuadorian tourism, whose contribution to the country’s GDP is forecast to grow at an annual rate of 4.5% from 2017 to 2027, according to the World Travel & Tourism Council (WTTC).

    To read on, visit Air France Joon in Latin America: now Quito flights


    Saudi Arabia Aviation: Saudia transforms and the market grows

    Saudi Arabia’s aviation market has entered a new phase of rapid growth, facilitated by liberalisation. Saudi Arabia recorded 8% passenger growth in 2017 and the rate of growth could reach the double digits over the next several years.

    Five airlines now serve the domestic market, compared to only two airlines two years ago. Intensifying competition has led to lower fares, stimulating demand and leading to faster growth, although overcapacity is a potential concern.

    The international market is expanding rapidly and has an even brighter outlook, driven primarily by rising inbound demand as Saudi Arabia focuses on tourism as part of a diversification strategy. Aviation is also a major priority for the government, leading to an ambitious expansion plan at the flag carrier Saudia and the opening of a massive new terminal at Jeddah Airport.

    To read on, visit Saudi Arabia Aviation: Saudia transforms and the market grows


    Low cost long haul disrupts North Atlantic aviation

    Change is now in the air as low cost long haul operators capitalise on the capabilities of new narrowbody aircraft and increasing liberalisation to stimulate competition in markets traditionally dominated by full service carriers.

    As a prime example, LCCs, led by Norwegian, have been encroaching on the tightly controlled North Atlantic route over the past five years. LCC growth here and elsewhere owes much to new, more cost efficient aircraft types – both the widebodies, such as the 787, and the narrowbodies, such as the Boeing 737 MAX and A321neo.

    A panel discussion at the inaugural CAPA Low Cost Long Haul Summit in Seville on 4-5 October 2018 will consider the role of new aircraft technology in opening up new long haul markets for LCCs. It will also consider the response of legacy airlines in defending existing routes or taking the fight to the LCCs with new routes of their own.

    This report provides some context for this discussion by looking at the importance of new routes to the growth in North Atlantic capacity since 2012, which was the year before Norwegian entered. New airport pairs have driven the majority of seat growth on the North Atlantic since 2012, but incumbent airlines (and airports) have added more seats than new entrants.

    To read on, visit Low cost long haul disrupts North Atlantic aviation


    MRO in Thailand: rapid growth as U-Tapao and Sukhothai facilities open

    Thailand is planning major expansion of its MRO sector, which should enable the country’s maintenance providers to compete for more regional business. Thailand currently has relatively limited MRO capacity, making it difficult to handle its own fast growing fleet.

    The Thailand government is heavily promoting and investing in a new maintenance complex at U-Tapao Airport outside Bangkok. Thai Airways’ maintenance division, Thai Technical, is planning to open a new joint venture widebody airframe maintenance facility at U-Tapao with Airbus and could forge partnerships with other manufacturers. The largest LCC group in Thailand, AirAsia, is also aiming to establishing a MRO complex at U-Tapao.

    Thai Technical’s main facility is now at Bangkok’s old airport Don Mueang, while Thai AirAsia outsources its maintenance. Bangkok Airways and several independent MRO providers also have facilities at Don Mueang, where there is limited, or no, space for expansion.

    To read on, visit MRO in Thailand: rapid growth as U-Tapao and Sukhothai facilities open


    Iran Aviation: sanctions bite as BA, Air France and KLM withdraw

    The return of US sanctions against Iran in Aug-2018 is having a significant impact on the Iran-Western Europe aviation market.

    British Airways will suspend its London Heathrow-Tehran service from 23-Sep-2018, leaving Iran Air as the sole operator on the route. BA has said that the route is no longer commercially viable, due to a fall in the number of business travellers.

    KLM is to cease operating Amsterdam-Tehran from 24-Sep-2018, blaming the route’s negative results and financial outlook. Iran Air will also be the only airline on this route. From the same date, Air France’s Joon-branded service from Paris CDG to Tehran will also be suspended, leaving the route to Mahan Air and Iran Air.

    Austrian Airlines will suspend its triangular Vienna-Shiraz-Isfahan-Vienna service in late Sep-2018, although it will maintain its Tehran operation. In addition, Aegean Airlines will discontinue its service to Tehran from Athens (included in Eastern/Central Europe) from 11-Oct-2018, leaving no other operator.

    To read on, visit Iran Aviation: sanctions bite as BA, Air France and KLM withdraw