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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.


    Sofia Airport: Bulgaria appoints Meridiam/Munich Airport consortium

    The result of a long-running procedure to find a concessionaire for Sofia Airport in Bulgaria has concluded, with the award being made to a consortium. Following a 90-day tender evaluation, Bulgaria’s Ministry of Transport (MoT) has selected a consortium comprising Munich Airport GmbH and the asset manager Meridiam to operate and manage Sofia Airport for 35 years under the consortium name ‘Sof Connect’.

    This outcome was pretty well unexpected because those two had not figured highly in the odds and had not made the highest financial offer.

    However, perhaps it was a dose of pragmatism that won the consortium this deal as they identified crucial infrastructure and operational failings and offered to do something about them forthwith, rather than engaging in airy-fairy musings on grand schemes in the distant future.

    To read on, visit Sofia Airport: Bulgaria appoints Meridiam/Munich Airport consortium


    Long haul LCCs, Asia Pacific: Citilink becomes newest operator 

    Citilink will become the twelfth Asia Pacific LCC operating widebody aircraft in 4Q2019 as it takes delivery of two A330-900neos. The Garuda Indonesia subsidiary is slated to become only the fourth LCC to serve the Southeast Asia-Europe market as it launches services from Jakarta to Frankfurt.

    There are now more than 100 widebodies operated by Asia Pacific LCCs, but only a small fraction is used on long haul routes of more than nine hours. Almost all of Asia’s widebody LCC fleet is used on medium haul services of four to nine hours within Asia Pacific.

    Inevitably, Asia’s LCCs will launch more long haul services. However, the focus will remain primarily on the short and medium haul routes within Asia Pacific, including six- to eight-hour routes that in future will be able to be operated with new generation narrowbody aircraft as well as widebodies.

    Europe and North America will remain relatively unattractive due to intense competition from full service airlines, although there will be some niche opportunities in these markets for Asian LCCs.

    To read on, visit Long haul LCCs, Asia Pacific: Citilink becomes newest operator 


    Central Europe-US aviation: American Airlines chases leader LOT Polish

    American Airlines announced on 8-Aug-2019 that it plans to launch three new routes from Chicago to destinations in Central Europe in summer 2020. Operated by 226 seat Boeing 787-8 aircraft, the new routes will serve Krakow and Prague five times weekly and Budapest four times weekly from May-2020 to Oct-2020.

    This will add 14 weekly frequencies to a market that has only 85 frequencies this summer, based on OAG data for the week of 12-Aug-2019 on routes between the US and Central Europe (excluding Turkey, Greece, Cyprus and CIS).

    There are currently just five airlines operating in this market. LOT Polish is the market leader by seats, and Air Serbia is the only other operator based at from the European end.

    At the US end, all three of Delta, American and United are present since United’s launch of New York Newark-Prague in Jun-2019. Delta has been present the longest, but American has grown most aggressively since its summer 2018 entry.

    American’s three new routes for summer 2020 will not add a new operator, but if all other capacity remains unchanged they will add 15% more capacity to the US-Central Europe market.

    To read on, visit Central Europe-US aviation: American Airlines chases leader LOT Polish


    Copa Airlines ups 2019 guidance, despite 737 MAX grounding

    Panama’s Copa Holdings is one of many Boeing 737 MAX operators worldwide navigating the grounding of the aircraft, and has stated that it assumes the aircraft will not resume service until mid Dec-2019 at the earliest.

    Similarly to other MAX operators, Copa is battling cost and revenue headwinds due to the grounding after being forced to deploy less efficient aircraft on routes previously operated by the MAX. The company is joining a chorus of operators outlining the costs and revenue challenges that they continue to face as the aircraft type remains inoperable. There is little doubt that the airline, and others, are preparing to have frank conversations with the airframer about proper compensation for the unexpected operational disruptions.

    Copa’s operating environment remains relatively stable, and despite the challenges that the airline continues to face as its MAX jets remain grounded and deliveries of additional aircraft remain uncertain, the company has upped it 2019 margin guidance.

    To read on, visit Copa Airlines ups 2019 guidance, despite 737 MAX grounding


    Southwest Airlines in Hawaii: capacity, competition still growing

    Southwest Airlines made its highly anticipated and long awaited entry into the Hawaiian market in Mar-2019, but its expansion to Hawaii was curtailed by the grounding of the Boeing 737 MAX.

    Despite a slower than expected roll-out of its service to the Hawaiian Islands, Southwest’s entry has still created headwinds in the market as the extra capacity continues to pressure fares. Now Southwest plans to move ahead with the addition of more routes to Hawaii, which means that existing operators will continue to feel pressure from that additional capacity in the market.

    Hawaiian Airlines is bearing the brunt of Southwest’s expansion from the mainland to Hawaii and in inter-island markets. And that pressure shows no signs of abating for the foreseeable future.

    To read on, visit Southwest Airlines in Hawaii: capacity, competition still growing