Catch up on CAPA’s exclusive market analysis pieces – Singapore Airlines, Saudia, Europe-Latin America, Japan Airlines 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.

A350-900ULR: Singapore Airlines could be the sole customer

The first A350-900ULR has rolled out of the paint shop in Toulouse ahead of the delivery to its launch customer – and perhaps the only customer – Singapore Airlines (SIA). The aircraft is scheduled to enter service on 11-Oct-2018 as SIA resumes nonstop flights from Singapore to Newark, following a five-year hiatus. The A350-900ULR is a new longer range variant of the A350-900 developed by Airbus for SIA. It is available to other airlines but will likely only be acquired by SIA, given SIA’s unique ultra long range requirement. SIA ordered seven A350-900ULRs in 2015. All seven aircraft are now in assembly and will be delivered by the end of 2018.

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Saudi Arabia aviation: Saudia transforms and the market grows

Saudi Arabia’s aviation market has entered a new phase of rapid growth, facilitated by liberalisation. Saudi Arabia recorded 8% passenger growth in 2017 and the rate of growth could reach the double digits over the next several years. Five airlines now serve the domestic market, compared to only two airlines two years ago. Intensifying competition has led to lower fares, simulating demand and leading to faster growth, although overcapacity is a potential concern. The international market is expanding rapidly and has an even brighter outlook, driven primarily by rising inbound demand as Saudi Arabia focuses on tourism as part of a diversification strategy. Aviation is also a major priority for the government, leading to an ambitious expansion plan at the flag carrier Saudia and the opening of massive new terminal at Jeddah Airport.

To read on, visit Saudi Arabia aviation: Saudia transforms and the market grows

Europe-Latin America aviation: Air France-KLM the biggest operator

Europe is Latin America’s most important international region outside the Americas by seat numbers, while Latin America is Europe’s smallest international market. Nevertheless, European airlines dominate the Europe-Latin America market. This report gives a top-down overview of country markets to Latin America from European countries ranked by seat capacity and growth rates. Seat capacity from Europe to Latin America is dominated by Spain, France, the UK, the Netherlands and Germany. These five countries have a seat share of 83% and there are only 17 European countries in the market. By contrast, the top five Latin American countries, ranked by seat numbers to Europe, have only 58% of seats and there are 32 Latin American countries in the market. Spain is the biggest European market by seats to Latin America, followed by France. In third place is the UK, which has enjoyed the fastest average growth in seat numbers to the region over the past five years. Sweden, Norway, Denmark, Sweden and Ireland have gained Latin America services within the past four years.

To read on, visit Europe-Latin America aviation: Air France-KLM the biggest operator

JAL-China Eastern plan short haul JV: a small step towards cooperation

Japan Airlines and China Eastern plan to implement a short haul Japan-China joint venture in 2019. This will be the first JV between airlines of the two countries and one of a small number of short haul JVs in Asia. The longstanding partners already have extensive international and domestic codesharing. They appear to be pitching their JV with the usual litany of benefits, but for now the agreement presents a small step change. JAL has a strong corporate Japan travel profile that is sticky to Japanese service and does not want to travel on another airline. A JV would need to share financials and coordinate growth, yet China Eastern typically has to meet government growth targets. JAL has high costs and high yields, whereas China Eastern has comparatively low costs and low yields. Connections are less important in short haul JVs than in long haul ones, and JAL and China Eastern would potentially have to transfer passengers using their high-yielding Shanghai-Tokyo flights.

To read on, visit JAL-China Eastern plan short haul JV: a small step towards cooperation

Corporate travel: US big 3 airlines cut capacity, grow revenues

The three major global US airlines, American, Delta and United, have all opted to reduce their 2018 capacity forecast for 2018 in light of growing fuel costs, and the fuel price pressure has resulted in both American and Delta lowering their share price guidance for the year. During 2Q2018 Delta and United were able to capture about 75% of their respective increases in fuel, while American is declaring that a fuel price of USD75 per barrel is the new reality. Despite the fuel cost headwinds, American, Delta and United have reasonably positive outlooks for their respective corporate performance, although American is warning that its overall unit revenue growth rates are slowing in comparison with its two largest competitors, and the airline has decided to make changes in its basic economy offering to bolster its position among cost conscious customers.

To read on, visit Corporate travel: US big 3 airlines cut capacity, grow revenues

Bangkok-Samui: Southeast Asia’s largest monopoly air route

Bangkok-Samui will become a monopoly market for Bangkok Airways in Sep-2018 as Thai Airways suspends the route. Thai Airways will rely on Bangkok Airways to provide offline access to Samui Island, one of Thailand’s most popular destinations, building on a codeshare partnership that began in 2017. Bangkok-Samui is already the only top 50 city pair within Southeast Asia that is not served by an LCC. It will also become, from 2-Sep-2018, the only top 50 city pair in the region that is served by just only one airline. Bangkok Airways was the only airline serving the Bangkok-Samui route until 2008, when Thai Airways entered the Samui market with two daily flights. Bangkok Airways owns and operates the Koh Samui Airport, but in recent years has set aside five slot pairs for other airlines.

To read on, visit Bangkok-Samui: Southeast Asia’s largest monopoly air route

Women airline pilots: a tiny percentage, and only growing slowly

It is 109 years since Baroness Raymonde de Laroche became the first woman to fly solo in 1909. In spite of the significant contribution to aviation made by a large number of women over more than a century (the Pioneer Hall of Fame pages on the website of Women in Aviation contains many), aviation still has a long way to go in pilot gender equality. CAPA has been active in reviewing the issue of women in airline management over the years, but the trends leave few grounds for encouragement. Data for the US and the UK indicate that just over 4% of airline pilots are women. This share is growing, but very slowly. According to the International Society of Women Airline Pilots, the US big three airlines have the highest number of women pilots and the Indian LCC IndiGo has the highest proportion (13.9%). However, consistent global data on women airline pilots do not exist. The background papers for an Aug-2018 ICAO conference, ‘Global Aviation Gender Summit’, incorrectly used a figure of 5.18% from the Airline Pilots Association International (which represents pilots in the US and Canada) as a global ratio. This is a much needed event, but if a global aviation organisation at a conference dedicated to improving the industry’s gender balance cannot precisely calibrate the challenge, then the challenge must be great.

To read on, visit Women airline pilots: a tiny percentage, and only growing slowly

New Zealand-Indonesia aviation market: Emirates to push rapid growth

 Traffic between New Zealand and Indonesia should grow significantly over the next year following the launch of the first year-round route between the two countries. In Jun-2018 Auckland-Bali became the latest fifth freedom route for Emirates, stimulating demand on a route previously only served seasonally by Air New Zealand. Emirates often has a profound impact when it enters a new market as a fifth freedom competitor. For example, Emirates significantly shook up the Italy-US market when it launched Milan-New York services in 2013, prompting a vicious response from US majors. Emirates already had significant fifth freedom experience in New Zealand, competing for several years on multiple trans-Tasman routes to Australia. Emirates now serves only one trans-Tasman route, compared to four just over two years ago, but has resumed expansion in New Zealand with the new Auckland-Bali-Dubai service.

To read on, visit New Zealand-Indonesia aviation market: Emirates to push rapid growth