Catch up on CAPA’s exclusive Market Analysis pieces – Air New Zealand, Virgin Australia, Colombia aviation, Munich Airport and more

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.


Air NZ and Virgin Australia: Tasman capacity to surge

Air New Zealand and Virgin Australia have both unveiled plans to add capacity in the Australia-New Zealand market after their joint venture ends on 27-Oct-2018. The two airlines will compete against each other on 10 cross-Tasman routes following the launch of two new routes for each airline.

The Air New Zealand-Virgin Australia JV covers 20 routes and accounted for a 52% share of the Australia-New Zealand market in FY2017. Air New Zealand has more than twice as much capacity as Virgin Australia and should be able to maintain this gap as both airlines add approximately 15% capacity following their divorce.

The Qantas Group, the only other main competitor in the Australia-New Zealand market, will lose market share unless it also decides to pursue strategic expansion. Qantas has already expanded capacity to New Zealand by approximately 25% to fill the void left by three cross-Tasman route suspensions by its partner Emirates.

To read on, visit Air NZ and Virgin Australia: Tasman capacity to surge


Colombia aviation: taxation to hurt national competitive stature

Colombia’s domestic passenger levels fell in 2017, driven in part by a pilot strike at the country’s largest airline Avianca. But the country has posted impressive growth in its domestic air travel market during the past seven years, with passenger levels expanding by more than 60% from 2011 to 2017.

The country’s aviation sector has changed during the past couple of years as LATAM Airlines Colombia has debuted a new pricing structure and Copa Colombia has transitioned to a low cost airline, Wingo. Those changes have occurred as Latin America’s airlines are adapting to low cost airline growth in the region.

There’s still much runway for passenger stimulation in Colombia’s domestic and international markets, but similarly to many countries in Latin America, Colombia could risk jeopardising air passenger growth through a passenger fee proposed by Bogotá’s mayor, which would levy a new tax on passengers to fund investments in road infrastructure.

To read on, visit Colombia aviation: taxation to hurt national competitive stature


Kazakh airline fleet: growth, and fleet renewal from major airframers

In Oct-2018 Kazakhstan is poised to become the first country with aircraft from all three families of new generation single aisle re-engined aircraft. Air Astana became one of the first A320neo operators in 2016, and later this year will become one of the first Embraer E190-E2 operators. Kazakhstan’s second largest airline, SCAT, took delivery of its first 737 MAX 8 at the end of Mar-2018.

For all three new aircraft types to be operating in Kazakhstan represents a major transformation, given that the market has historically been dominated by ageing aircraft and Russian models. Kazakhstan became independent in 1991, but for years its airlines continued to operate Soviet era aircraft.

Change began with Air Astana, which has only ever operated Western aircraft in its 16-year history and took its first new aircraft nearly 10 years ago. SCAT has been around for over 20 years but only phased out its last Russian aircraft in 2016, and the 737 MAX 8 marks the first time the airline has ever taken delivery of a new Western aircraft.

To read on, visit Kazakh airline fleet: growth, and fleet renewal from major airframers


Munich Airport: long haul growth as Lufthansa A380s arrive

In 2019 Lufthansa plans to launch another one or two long haul destinations from its expanding Munich hub. Lufthansa is considering expansion of its Munich-US network, which currently consists of 10 destinations.

Lufthansa currently has 21 long haul destinations from Munich, including 13 in the Americas and eight in Asia. On 27-Mar-2018 Singapore became the eighth destination in Asia for Lufthansa’s Munich hub – and first in Southeast Asia. The relaunch of Munich-Singapore and the recent introduction of A380s on the Munich to Beijing and Hong Kong routes has driven a more than 40% increase in Lufthansa’s Munich-Asia capacity.

Lufthansa previously served Munich-Singapore but suspended the route in Oct-2012. Lufthansa is using Singapore as a hub for Southeast Asia and Australia under its joint venture with Singapore Airlines (SIA) and SilkAir, which was initiated in Oct-2017.

To read on, visit Munich Airport: long haul growth as Lufthansa A380s arrive


JetSuite charter airline: more mainstream with Qatar, JetBlue

After generating a buzz two years ago from an investment by JetBlue, the public charter operator JetSuiteX has operated largely under the radar. But an expanded investment by JetBlue, and Qatar’s decision to invest in JetSuiteX, have once again lifted the charter company’s profile.

Theories abound for the reasoning behind Qatar’s decision to invest in JetSuiteX, but the charter company’s model – scheduled, private jet-like service for a fraction of the price – is gaining some traction in the US as frustration with commercial air travel grows.

JetSuiteX has significant ambitions to grow its fleet from six small jets to possibly 100, which means it aims to broaden its reach beyond a few markets in California and Nevada significantly. Obviously there is a gap between ambition and profitability, but JetSuiteX has no lack of confidence that its model can reach greater scale.

To read on, visit JetSuite charter airline: more mainstream with Qatar, JetBlue


Jakarta-Singapore route: highly competitive; competition intensifies

Singapore-Jakarta is one of the world’s largest international routes but is also one of the most competitive. Competition will intensify further later this year as Garuda Indonesia’s LCC subsidiary Citilink enters the market with two daily flights.

Citilink will be the fifth LCC to serve the Singapore-Jakarta route and its parent Garuda will become the third airline group competing with two brands. Batik-Lion and Singapore Airlines-Scoot are the other two brand combinations. The route is also served by Jetstar Asia, which is affiliated with a full service airline, Qantas, and the leading independent LCC group AirAsia.

Citilink is one of Southeast Asia’s oldest LCCs and is relatively large, operating 50 aircraft. However, it is only now starting to pursue international expansion. Bangkok and Singapore are the first international destinations for the Garuda Indonesia Group’s evolving dual brand strategy.

To read on, visit Jakarta-Singapore route: highly competitive; competition intensifies