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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.


    Virgin Atlantic mulls Cape Town. South Africa aviation resurgence?

    Virgin Atlantic Airways’ new network plan for an expanded London Heathrow airport appear to confirm that it is considering the relaunch of a direct flight between London and Cape Town. Previously the airline operated from Heathrow to Cape Town, but withdrew in 2015.

    The city pair is currently dominated by British Airways. Based on the northern winter 2020/2021 schedule, BA operates 17 weekly frequencies between London and Cape Town (14 from Heathrow and three from Gatwick), while Thomas Cook’s demise removes the only other competitor (it was to operate three weekly frequencies), based on the week of 6-Jan-2020 (source: OAG).

    More broadly, the aviation market between Europe and South Africa has experienced unspectacular growth over the past three years, after a four-year period of no growth between 2012 and 2016.

    It may be ripe for further stimulation.

    To read on, visit Virgin Atlantic mulls Cape Town. South Africa aviation resurgence?


    Interjet’s challenges rise as Mexico market competition intensifies

    Mexico’s third largest airline Interjet has faced a confluence of events that are creating formidable challenges for the company. The airline is struggling to rid itself of Sukhoi Superjet narrowbodies that have been plagued by maintenance issues, at the same time as attempting to correct assumptions that it is headed for bankruptcy, and has reportedly also faced staffing issues.

    As it works through all those issues, Interjet is making significant network changes that include bulking up its operations in Mexico City and creating a hub in Cancún. It remains to be seen whether the latest changes will be successful, and Interjet is undertaking its network revamp at a time when the airline’s yields are decreasing and costs are expanding.

    Interjet has always billed itself as Mexico’s value airline and its traffic and passenger levels continue to grow, but it faces an uphill climb in its quest to return to profitability as its lower cost rivals continue to compete fiercely in Latin America’s second largest aviation market.

    To read on, visit Interjet’s challenges rise as Mexico market competition intensifies


    Virgin Atlantic Airways plans BA challenge at expanded Heathrow

    In a direct challenge to British Airways’ dominance, Delta-backed Virgin Atlantic Airways has set out plans for an aggressive expansion of its network from London Heathrow. Virgin regards itself as a potential second flag carrier for the UK, offering lower fares and greater choice to consumers.

    Virgin’s plans would take its Heathrow long haul network from 19 routes to 54. They would also expand its network to embrace UK domestic routes (12 of them) and short/medium haul European routes (37 of them). They include routes that are BA or IAG monopolies in addition to destinations that are not served by BA, and entirely new destinations for Heathrow.

    However, Virgin will only add these 84 new routes if Heathrow’s proposed third runway is built and if the slot allocation system is changed. Virgin and its partners have 8.6% of slots at Heathrow (3.5% for Virgin itself), whereas IAG and its partners have close to 60% (51.1% for BA). Virgin’s expanded network would require a disproportionate allocation of new capacity to it.

    However, that does not stop Virgin from casting itself in the familiar role of advocate for the consumer to put pressure on the incumbent.

    To read on, visit Virgin Atlantic Airways plans BA challenge at expanded Heathrow


    Thomas Cook departure shifts UK-Caribbean aviation dynamics

    Thomas Cook’s 23-Sep-2019 entry into liquidation reduces to three (all based in the UK) the number of competitors operating scheduled airline services between the UK and the Caribbean.

    A duopoly between British Airways and Virgin Atlantic until the airline subsidiaries of Europe’s two biggest tour operator groups entered the scheduled market (Thomas Cook Airlines in 2013 and TUI Airways in 2014), UK-Caribbean then settled into a stable four way oligopoly.

    Thomas Cook and TUI’s entry stimulated growth for a couple of years, but overall seat numbers have grown at a compound average rate of only 1.7% pa since 2015. Among the 24 routes operating in the winter high season week of 10-Feb-2020, there is competition only on the six biggest routes. Even on these competitive routes, there have been few significant capacity or frequency changes in recent years.

    The Caribbean is the UK’s biggest market by seats in Latin America, but its stable capacity compares with much faster growth to other markets in the region.

    To read on, visit Thomas Cook departure shifts UK-Caribbean aviation dynamics


    737 MAX: Brazil’s GOL maintains its long term bullishness

    Brazil’s largest domestic airline GOL has been a devout Boeing customer since the launch of the airline 18 years ago. The company has always operated a fleet of all Boeing aircraft and is one of the largest MAX customers worldwide, with 143 of the jets on order.

    Like numerous MAX operators, GOL has been working to combat challenges stemming from the grounding of the aircraft, including ensuring that it has ample fleet coverage, since the MAX’s return to service remains highly uncertain. The airline has made sure that it has an adequate fleet to cover the high season in Brazil, which starts in late 2019 and runs through Feb-2020.

    Even with the challenges created by the grounding of the MAX, GOL expects to hit its previously declared EBIT margin targets, which is commendable, given the disruptions triggered by the removal of the aircraft from the airline’s fleet.

    To read on, visit 737 MAX: Brazil’s GOL maintains its long term bullishness