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    Argentina turmoil: Norwegian cedes LCC operations to JetSMART

    A little more than year after launching domestic operations in Argentina, Norwegian Air Argentina is exiting the market and selling a 100% stake to JetSMART Argentina.

    Norwegian is trying to achieve sustained financial health, and a three aircraft operation halfway around the world seems like a logical cord to cut. Argentina’s economy is faltering, and the administration that instituted reforms for the establishment of LCCs in the country was voted out of office in Oct-2019.

    If the incoming government preserves the reforms that paved the way for low cost operators to enter the market, two ultra low cost airlines will remain in Argentina – Flybondi and JetSMART Argentina. Perhaps a more rational number of low cost operators for the country.

    For now, all airlines in Argentina are battling currency headwinds and general unease as the country’s economy continues to suffer. Even as inflation climbed to more than 50%, Argentina’s domestic passenger growth remained solid, but in Oct-2019 it slowed to flat growth year-on-year after double digit market increases for most of this year.

    To read on, visit Argentina turmoil: Norwegian cedes LCC operations to JetSMART

    Hong Kong traffic decline hurts airlines and airport

    Hong Kong travel demand has experienced a seismic shock from the civil unrest that has swept the special administrative area. This has had major ramifications for airlines, particularly Hong Kong-based Cathay Pacific and Hong Kong Airlines. Both have experienced a plummet in demand, prompting major capacity cuts that have been extended into 2020.

    It is not yet clear what the full financial impact will be for the airlines.

    For the Cathay group airlines and Hong Kong Airlines the loss of traffic and revenue hit when they were already in fragile financial condition – particularly so, Hong Kong Airlines – and broader economic concerns are also growing for Asia’s airline industry.

    To read on, visit Hong Kong traffic decline hurts airlines and airport

    Iberia’s purchase of Air Europa and the impact on the ‘Madrid hub’

    Several primary hub airports in Europe would like to be recognised as the most significant one connecting that continent with Latin America; Paris Charles de Gaulle and Frankfurt numbered amongst them, and Lisbon. But it has been Madrid that has usually ruled the roost.

    Spain’s economic recession and its impact on Iberia threatened that position several years ago when the airline cut many of its westbound long haul routes, opening a window of opportunity for competitors.

    The recently announced purchase agreement between Iberia (part of IAG) and Air Europa (Globalia), which is scheduled for completion in 2H2020, theoretically alters the balance again in favour of Madrid, but it is not clear yet how the combined airline will accommodate that Latin American region as the larger Iberia seeks to become a ‘360° hub’.

    To read on, visit Iberia’s purchase of Air Europa and the impact on the ‘Madrid hub’

    Major US airlines are playing the long game with their Asia strategies

    US Airlines generally adopt a long term view in their trans Pacific strategies, often enduring short term pain for what they believe will be higher returns in the mid to long term.

    The North America-Asia market is tough. It was plagued by overcapacity and low yields even before the US-China trade spat and political unrest in Hong Kong.

    US airlines have long complained that securing favourable slot times at China’s airports is a challenge, and American cut its service from Chicago to China last year, being eventually forced to return slots covering those flights that its rivals are looking to use.

    There is no clarity on whether the trans Pacific fortunes of American, United and Delta will get worse before they get better, and there is no lack of scrambling by some of those airlines to gain coveted slots to ensure that they will be a competitive force in the trans Pacific for years to come.

    To read on, visit Major US airlines are playing the long game with their Asia strategies