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.


    SE Asia-US market: new nonstop flights will be challenging to sustain 

    A staggering 31 new nonstop frequencies are being added between Southeast Asia and the continental US over the next two months. In Dec-2018 there will be 70 weekly nonstop flights between Southeast Asia and the continental US, compared to only 39 currently.

    The new nonstop flights will shake up the Southeast Asia-US market, particularly the premium segment. Premium seat capacity (business and premium economy) is nearly tripling, from 1,890 to 5,632 one-way seats, and regular economy capacity is increasing by 32%, to 13,242 one-way seats.

    The Southeast Asia-US market has historically been served primarily by one-stop products. The introduction of new generation widebody technology is enabling more nonstop services, but low initial yields will make it challenging to sustain the new nonstop flights – particularly given the recent rise in fuel prices.

    To read on, visit SE Asia-US market: new nonstop flights will be challenging to sustain 


    Artificial intelligence in aviation: AI offers huge potential

    Artificial intelligence itself is nothing new and has long been harnessed by the aviation industry (for example, flight management systems and autopilots). Nevertheless, the industry – indeed, the broader economy – is at an inflection point where AI’s capabilities are making an upward leap, thanks to improvements in readily available computing power. This is coinciding with an explosion in data availability and processing need.

    A Jun-2018 IATA white paper on artificial intelligence defines AI as “computer programs that exhibit human-like intelligence such as logical reasoning, problem solving and learning”. It adds that AI comes in embodied (e.g. Robots) and disembodied (e.g. Apple Siri, Google Now) forms.

    AI’s focus has changed from supporting simple repetitive tasks to learning and aping human behaviours and tasks. The unfolding AI revolution has potentially significant implications for all business processes, including customer interaction, operations, the supply chain, and support functions.

    AI can provide benefits both through the optimisation and the replacement of existing processes and systems. It is set to act as a disruptor in the labour market, since it will lead to significant change in the activities carried out by people and also those tasks better suited to machines.

    To read on, visit Artificial intelligence in aviation: AI offers huge potential


    Phu Quoc Airport: rapid international growth as AirAsia arrives

    Phu Quoc Island in Vietnam has emerged as a popular destination and is experiencing rapid growth in international visitors. AirAsia will help Phu Quoc further raise its international profile when the Malaysian LCC launches flights to Phu Quoc from Kuala Lumpur in early Nov-2018.

    AirAsia will significantly improve connectivity between Phu Quoc and several markets in Southeast Asia, South Asia and Australia. Connectivity with Europe improved significantly in late 2017 when Bangkok Airways launched services to Phuket from Bangkok.

    A new but small international airport opened on Phu Quoc in late 2012. International flights began in 2014 but accounted for only 12% of total passenger traffic in 2017. China has so far been the biggest international market for Phu Quoc and is one that is growing rapidly.

    To read on, visit Phu Quoc Airport: rapid international growth as AirAsia arrives


    Chorus Aviation: regional aircraft leasing business is looking solid

    It’s been a year since Chorus Aviation made its debut into the regional aircraft leasing business, leveraging its long history of small jet and turboprop operations.

    Chorus’ leasing business has built up a fleet of 26 aircraft, with 10 global customers.  The company’s leasing arm is also branching out, working with airlines to forge operating leases for new aircraft deliveries and sale and leaseback agreements for some aircraft in customers’ existing fleets.

    However, Chorus management is taking great care to stress the measured approach it is adopting for its leasing business; but at the same time, it is expecting plenty of opportunities in the pipeline.

    To read on, visit Chorus Aviation: regional aircraft leasing business is looking solid


    Allegiant Air: overcoming scepticism as it diversifies its business

    Unsurprisingly, Allegiant Travel is meeting scepticism from the investment community in response to its planned Sunseeker resort scheduled to open in Southwest Florida in 2020. Any time an airline branches outside its core business of transporting passengers investors get antsy, and in most cases that anxiety is warranted.

    But there’s a new twist to it. Allegiant’s enthusiasm for Sunseeker remains as robust as it was when the company announced the new venture a year ago. That excitement stems from Allegiant’s ability to mine passenger data to determine demand for the resort, which has undergone shifts in its business model over the course of a year.

    Of course, the biggest risk for Allegiant in its new venture is in meeting its projections for Sunseeker, which include revenue of USD113 million by year five of operations, with an EBITDA margin of 40.9%.

    To read on, visit Allegiant Air: overcoming scepticism as it diversifies its business


    Philippines-South Korea aviation: rapid growth driven by LCCs, tourism

    South Korea has emerged as the largest international market from the Philippines and the largest source market for the Philippine tourism industry. South Korea has helped drive rapid growth in international traffic from the Philippines this decade along with rapid visitor growth.

    South Korean visitor numbers to the Philippines have tripled over the past eight years. More than 1.6 million South Koreans now visit the Philippines annually.

    While five Philippine airports are connected with South Korea, Manila and Cebu dominate the market. The Cebu-South Korea market has particularly grown rapidly, and South Korea now accounts for 60% of total international traffic at Mactan-Cebu, the Philippines’ second largest airport.

    To read on, visit Philippines-South Korea aviation: rapid growth driven by LCCs, tourism