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.

    London-New York: JV share stabilises 5 years after Norwegian Air entry

    British Airways’ service between London Heathrow (LHR) and New York John F Kennedy (JFK) is the world’s most lucrative airline revenue route. In the year to Mar-2019, it generated USD1.2 billion – the only route with revenue of more than USD1 billion, according to OAG.

    More broadly, the London-New York city pair is the world’s largest international route by ASKs and the largest intercontinental route by seats (and second largest of all international routes by seats). LHR-JFK (London Heathrow-New York JFK) is the largest international airport pair by ASKs and the largest intercontinental airport pair by seats.

    London-New York is dominated by two antitrust-immune joint ventures.

    British Airways/American’s share is 48.7% and Virgin Atlantic/Delta’s share is 28.4%, according to data from OAG. Norwegian’s share has grown to 10.0% from a standing start in 2014. The JVs, particularly Virgin/Delta’s, have lost share since Norwegian entered, but this is now stabilising. Moreover, Virgin and Delta plan to upgauge on LHR-JFK and to add a JFK service from London Gatwick (LGW), operated by Virgin, in 2020.

    This report presents CAPA’s analysis of OAG capacity data on the London-New York market, examining growth and seat share by airport pair, airline, and joint venture.

    To read on, visit London-New York: JV share stabilises 5 years after Norwegian Air entry

    Vietnam’s Airports Corporation nationalised: Groupe ADP deal scuttled

    Vietnam is one of several countries in Southeast Asia where, on the surface at least, it appears as if the government is keen to attract both domestic and foreign investors to its airports portfolio. That appearance might be a little misleading, though.

    Aéroports de Paris, which then became Groupe ADP in 2017, looked to tie up a deal with ACV whereby Groupe ADP would acquire a 7.4% equity stake (later 20%) in ACV and make long term investments there. The government approved the deal but it was then stalled by both ACV and Groupe ADP owing to multiple disagreements.

    The Vietnamese government currently owns 95.39% of Airports Corporation of Vietnam (ACV), with the remaining 4.61% held by both local and foreign investors. Now, while Ministers are saying that they still welcome investment, the government is proposing to buy back the few shares in ACV not owned by the state, thus effectively nationalising it.

    To read on, visit Vietnam’s Airports Corporation nationalised: Groupe ADP deal scuttled

    WOW air collapse: the gap in Iceland aviation remains

    Total airline seat capacity in Iceland this year is set to plummet by more than a quarter versus 2018. This marks a sharp reversal of the strong double digit growth catalysed by the LCC WOW air in the six previous years, when the market leader Icelandair Group and foreign airlines also pursued rapid growth.

    WOW air’s exit in late Mar-2019 has not only removed the biggest contributor to capacity growth, but has also prompted most of the remaining airlines in Iceland to ease back on the throttle. Excluding WOW air, the collective capacity of Icelandair Group and other airlines will be flat this year.

    There is some variation within this. The LCC Wizz Air and the Nordic airlines Norwegian, SAS and Finnair are growing rapidly in Iceland, but Icelandair Group’s growth is modest overall and operators such as easyJet and British Airways are cutting capacity.

    In other aviation markets the gap left by the collapse of a major player is often fairly rapidly closed by other airlines. This is not yet happening in Iceland – evidence that demand had been artificially inflated by unsustainably low prices during the WOW air years.

    To read on, visit WOW air collapse: the gap in Iceland aviation remains