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.


    US-Hawaii air market: Southwest Airlines raises competitive pressure

    Even as Southwest Airlines’ competitors on its new routes to Hawaii have had the benefit of a reprieve from that airline’s expansion due to the continued grounding of the Boeing 737 MAX, the mega LCC’s market entry has created formidable pricing pressure.

    Those headwinds are strengthening in the coming months once Southwest resumes expansion to Hawaii, starting in late 2019 and continuing into early 2020.

    Additional routes planned by Southwest will continue to inflate competitive capacity between California and Hawaii. In addition to adding new inter-island flights that begin in late 2019 and continue into 2020, Southwest is also adding flights from Sacramento to Honolulu, Oakland to Kona and Lihue, and San Jose to Kona and Lihue.

    Alaska Air Group and Hawaiian continue to bear the brunt of Southwest’s competitive incursion, and either of those airlines may in fact retrench, or may suffer through increasingly tough conditions until some rationalisation returns to the market.

    For now, it seems as if Hawaiian and Alaska ar

    To read on, visit US-Hawaii air market: Southwest Airlines raises competitive pressure


    737MAX delays hurt Spanish airports as Ryanair cuts back

    Unions representing Ryanair cabin crew and pilots in Spain have protested the planned closure of four Ryanair bases at Tenerife-Sur, Gran Canaria Las Palmas and Lanzarote in the Canary Islands, and Girona on the mainland (northeast of Barcelona).

    The closures are expected to result in the loss of close to 520 jobs, including more than 120 pilots. Labour groups believe that the base closures are unjustified, with no reason given other than the grounding of the Boeing 737 MAX.

    In Jul-2019 Ryanair reduced its planned summer 2020 capacity growth from 7% to 3% because of expected delays to its MAX delivery schedule. Consequently, it said, it would need to close/cut its fleet at some bases for summer 2020 and winter 2019/2020. Its Canary Islands bases are understood to be heavily loss-making in the winter.

    Nevertheless, Spain is an important revenue source for Ryanair and is a very popular holiday destination for its customers.

    Overall growth in this market is slowing, even reversing this winter, after strong expansion in 2013 to 2017, partly reflecting some market consolidation. Ryanair is the leading Spain-Europe airline, although it has lost some market share. Spain, including the four airports where bases are set to close, will remain important to Ryanair.

    To read on, visit 737MAX delays hurt Spanish airports as Ryanair cuts back


    Balkans aviation: FlyBosnia to grow Bosnia-Herzegovina’s direct links

    FlyBosnia’s new service between London Luton Airport and Sarajevo is the only direct route between the UK and Bosnia and Herzegovina. Launched on 19-Sep-2019, London is its first destination in Europe, but the airline plans to add new European cities, such as Rome and Paris.

    Bosnia and Herzegovina’s aviation market is one of the smallest among the seven former Yugoslav Balkan states and ranks last by seats per capita. There are very few links with major Western European cities (or hubs).

    However, Bosnia and Herzegovina’s annual seat count has enjoyed the second highest growth rate between 2012 and 2019 (after North Macedonia).

    The birth of FlyBosnia coincides with the late Sep-2019 bankruptcy of another Balkan operator – Slovenia’s national airline Adria Airways. Without a national airline, Bosnia and Herzegovina has achieved strong growth in aviation in recent years, led by Wizz Air’s 2013 entry and that of Pegasus Airlines in 2013, and with a further boost from Ryanair’s entry in Oct-2018.

    FlyBosnia, which received its AOC only in Jan-2019, may also prompt growth in direct links to major Western European airports by competitors serving Bosnia and Herzegovina.

    To read on, visit Balkans aviation: FlyBosnia to grow Bosnia-Herzegovina’s direct links


    ULCC Spirit Airlines’ investors wary as short term challenges mount

    It has been a tough 2019 for Spirit Airlines, which is facing cost pressure from the recent fallout from Hurricane Dorian and from the airline’s earlier decision to drive up utilisation. The company’s projected unit revenue performance for 3Q3019 is weaker than those of its US industry peers.

    All of those factors are creating obstacles for Spirit in achieving favourable profit for the remainder of the year.

    Those headwinds are occurring as Spirit appears to be pivoting toward becoming a more “value” airline – working to engender a more positive sentiment among customers through improved operations and small changes to its aircraft cabins to create a bit more comfort.

    In the short term, Spirit’s valuation may continue stalling as markets look for signs of improvement beginning in 2020. The company’s preliminary cost guidance for 2020 is not producing a lot of market confidence.

    To read on, visit ULCC Spirit Airlines’ investors wary as short term challenges mount


    Air Canada marks a decade of transformation; the evolution continues

    The global aviation industry is so fast moving that there is little time to take a pause and gauge the strides that certain airlines have made in turning their businesses around.

    A decade ago Air Canada was nearly on the verge of another bankruptcy filing, and essentially had to reinvent itself from the ground up in nearly all facets of its business – cultural, financial and customer experience.

    A decade later, Air Canada’s reinvention is complete, and the company deserves credit for sticking to its plans despite some initial scepticism about its growth targets. While it still faces inevitable challenges that have recently included the grounding of its Boeing 737 MAX narrowbodies and other geopolitical difficulties, Air Canada should be able now to withstand those inevitable difficulties while continuing to deliver solid results.

    To read on, visit Air Canada marks a decade of transformation; the evolution continues