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.
Indonesia Angkasa Pura II’s Silangit Airport & Sumatra’s tourism
Silangit Airport in North Sumatra is poised to grow rapidly under an Indonesian government initiative to promote tourism at Lake Toba. Silangit is located less than 10km from the southern shore of Lake Toba, the world’s largest volcanic lake and one of Indonesia’s biggest tourist attractions.
Silangit Airport completed a runway extension and terminal expansion project in 2017, which resulted in the airport gaining international status. A second runway extension and terminal expansion project is planned and is expected to be completed by 2020.
Indonesia is investing in Silangit Airport, which is operated by the government-owned airport company Angkasa Pura II, as part of an initiative to boost international tourism. Lake Toba is now mainly a destination for domestic tourists due to access and infrastructure issues.
To read on, visit Indonesia Angkasa Pura II’s Silangit Airport & Sumatra’s tourism
EVA Air: new SE Asia services to feed North America network
Regional Asia growth does not receive the attention that intercontinental long haul growth does, but regional expansion provides the foundation connections for an expanded range of long haul flights. In Jul-2018 Eva Air inaugurated service to Chiang Mai, its 12th Southeast Asia destination. EVA Air disclosed that it is planning for its 13th and 14th destinations – Penang and Yangon. EVA Air may also fly to India.
Taiwan’s “Go South” policy encourages the economy – transportation and tourism included – to do more business in Southeast Asia in order to differentiate away from Northeast Asia and reduce reliance on mainland China. The new destinations will also help fuel EVA’s North America network, which accounts for approximately half of the airline’s system-wide flying. Half of EVA’s North American passengers connect beyond Taipei, mostly to Southeast Asia.
New destinations, especially those that few other competitors serve, add uniqueness. Rapid trans Pacific growth in recent years has necessitated a greater number of unique city pair combinations. Cathay Pacific’s regional arm Cathay Dragon is adding service to two Southeast Asian destinations not yet served by another Northeast Asian airline.
To read on, visit EVA Air: new SE Asia services to feed North America network
Western Europe-China aviation: Germany leads as other countries enter
China is the third biggest long haul market by seats from Western Europe after the USA and Canada. This report gives a top down overview of country markets to China from Western European countries ranked by seat capacity and growth rates.
Relative to the market from Western Europe to the USA, this market is more fragmented, with the leading countries less dominant. Nevertheless, the top five countries in Western Europe-China capacity – Germany, France, UK, Netherlands and Italy – control more than half of all Europe-China seat capacity.
Ireland, Greece and Portugal have all been added to the Europe-China market since summer 2017, while Spain, Austria, Belgium, UK and Italy have all enjoyed double digit average growth rates in capacity to China over the past five years.
LCCs have only a very small presence in Europe-China markets, but they are just starting to make their presence felt, thanks to airlines in the HNA Group, which also owns Hainan Airlines (another fast growing participant on Europe-China).
To read on, visit Western Europe-China aviation: Germany leads as other countries enter
Turboprop freighter aircraft: Cebu Pacific becomes first cargo LCC
Later this year Cebu Pacific will become the first low cost airline group to operate freighters. Cebu Pacific recently committed to two ATR 72-500 conversions and could potentially convert all eight of its ATR 72-500 passenger aircraft to freighters.
There are currently only slightly more than 100 ATR freighters in operation worldwide and the total large turboprop freighter fleet consists of less than 600 aircraft, according to the CAPA Fleet database. ATR is bullish on the cargo market and expects 460 turboprop freighters to be delivered over the next 20 years – a combination of newly launched ATR 72-600Fs and converted older models.
Demand is expected to be particularly strong in Southeast Asia. There are currently only 10 turboprop freighters in operation in Southeast Asia, compared to 400 passenger turboprops.
To read on, visit Turboprop freighter aircraft: Cebu Pacific becomes first cargo LCC
Longhaul low cost airlines: Europe’s LCCs see opportunities
Two factors appear to be driving the gradual emergence of partnerships between European short/medium haul LCCs and long haul operators (full service and low cost).
First of these: European LCCs are able to operate at a significantly lower unit cost on short/medium haul than most competitors with long haul networks. The provision of very cost efficient feed is an attractive idea to long haul operators, particularly as LCC networks expand to include more primary airports.
However, most LCCs, particularly the independently owned operators, are reluctant to enter into codeshares, to adapt their networks and schedules and to modify their business model in any way that might add cost and complexity in order to accommodate long haul partners.
The second factor is the emergence of European long haul low cost (LHLC) airlines. Just as with full service long haul, LHLC generally requires feed. Norwegian, Europe’s leading LHLC operator, feeds itself from its own short/medium haul network, but is still open to partnerships with others (as exemplified by its participation in easyJet’s ‘Worldwide’ connection partnership).
The CAPA Low Cost Long Haul Global Summit in Seville, Spain on 4-5 October 2018 will include panels on partnerships between LCCs and long haul operators.
To read on, visit Longhaul low cost airlines: Europe’s LCCs see opportunities
Peruvian aviation: steady domestic growth and airlines’ ambitions
Peru’s aviation market continues to hold much promise as the prospects for stimulation remain ripe. The country’s largest airline, LATAM Airlines Peru, logged solid passenger growth during 1Q2018. Peru’s second largest operator, Peruvian Airlines, continues to expand while aiming to launch a new subsidiary and promising to order up to 20 Russian-manufactured aircraft.
The Viva Group launched operations in Peru a little more than a year ago with the debut of Viva Air Peru. Recently, the airline has stated that it has a goal of transporting more than 900,000 passengers in 2018 after handling close to 500,000 customers during its first year of operations.
Capacity growth in Peru’s domestic market continues at a steady pace in 2018, but LATAM does not believe it will be an impairment to its performance in the country. Peru’s economic growth also continues at a steady pace, with projected economic growth of approximately 4% in 2018.
To read on, visit Peruvian aviation: steady domestic growth and airlines’ ambitions
Philippines: new international airport at Panglao/Bohol boosts tourism
Panglao Island is one of the most popular, and fastest growing, tourist destinations in the Philippines, and Bohol International Airport on the island is preparing to open for commercial operations in Aug-2018.
The new airport is expected to generate a significant increase in visitor numbers to Panglao as the island becomes more accessible, particularly for international tourists. Panglao attracts over 600,000 annual visitors, but only approximately one third of the visitors are foreigners.
Panglao is a short drive from Tagbilaran Airport, which will be closed and redeveloped after the new airport opens. Tagbilaran is a much smaller airport and space-constrained because of its location near the centre of Tagbilaran, the capital of Bohol province.
To read on, visit Philippines: new international airport at Panglao/Bohol boosts tourism