Catch up on CAPA’s exclusive Market Analysis pieces – Southeast Asia LCCs, Russia Airports, Alitalia bidders 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.

Southeast Asia LCC aircraft fleet approaches 700 aircraft following 10% expansion in 2017

Southeast Asia’s LCC fleet expanded by 10% in 2017 and will soon surpass 700 aircraft. The rate of fleet growth accelerated from 7% in 2016, but was slower than the 13% achieved in 2015 and the 16% in 2014.

There are currently 20 LCCs in Southeast Asia operating of the order of 690 aircraft, according to the CAPA Fleet Database. Vietnam’s VietJet Air had the fastest-expanding fleets in 2017, adding 17 aircraft and overtaking three airlines to become the fifth largest LCC in Southeast Asia, based on fleet size.

AirAsia Malaysia also grew rapidly, adding 13 aircraft. VietJet and AirAsia Malaysia, combined, accounted for nearly half of the additional aircraft for Southeast Asia’s dynamic LCC sector.

To read on, visit Southeast Asia LCC aircraft fleet approaches 700 aircraft following 10% expansion in 2017

 

Russia’s airports prepare for the World Cup: CAPA Global Airport Construction Database

The 21st FIFA World Cup will take place in Russia between 14-Jun/15-Jul- 2018, at 12 venues in 11 cities.

To keep travel time manageable, all but one of the stadium venues are in European Russia, west of the Ural Mountains.

Future tourism prospects are front of mind, and equally, any negative reports about Russian intentions concerning the Baltic States can be contained by the holding of matches in Kaliningrad (western, between Lithuania and Poland).

The level of investment and expenditure suggests that the Russian government is satisfied with the current state of the airports, and the sport facilities.

This report examines the improvements that are (and sometimes aren’t) being made to the airports that will handle the comings and goings of fans from all over the world, and contrasts the efforts being put into building or rebuilding the stadiums.

To read on, visit Russia’s airports prepare for the World Cup: CAPA Global Airport Construction Database

 

Alitalia’s bidders: Lufthansa, easyJet & Cerberus; workforce, restructuring, politics all critical

The commissioners of the Italian airline’s administration and the Italian government are considering three offers for Alitalia: from
– Lufthansa,
– the US private equity firm Cerberus, and
– easyJet (Air France-KLM denied any involvement in the process, following reports that it had bid jointly with easyJet).

The restructuring plan adopted by Alitalia in Mar-2017 included growth in the more profitable long haul network and a reworking and reduction of short haul in an attempt to make the airline more competitive with LCCs.

The plan was rejected by employees, who did not like the headcount reductions and labour cost saving targets, causing Alitalia to enter administration in May-2017. However, in administration, Alitalia has continued to grow its long haul network.

The balance between long haul and short haul is a critical issue to the bidders for Alitalia, with each having a different focus. Cultural change, restructuring and the end of political interference will also be crucial – but, as Alitalia’s unions have demonstrated many times, difficult to achieve.

To read on, visit Alitalia’s bidders: Lufthansa, easyJet & Cerberus; workforce, restructuring, politics all critical

 

China Southern 2018: Leaving SkyTeam Alliance becomes an option, but where to next?

The Guangzhou based airline has many accomplishments: it is Asia’s largest airline, the sixth group in the world and first outside the western hemisphere to transport over 100 million passengers a year, and it has rapidly grown while pivoting to international markets.

China Southern’s foundation remains strong, with a healthy outlook, but the airline is feeling a little lonely after developments in its SkyTeam Alliance.

First, Delta invested in China Eastern, and then in summer 2017 China Eastern and Delta invested in Air France-KLM and strengthened their partnerships. This was a wide-ranging alliance within SkyTeam that unmistakably excluded China Southern.

There may well be a sense China Southern has been relegated in status – which could prompt China Southern may feel it has to respond to by leaving the SkyTeam Alliance. This is probably more a reflection of the greater global focus on northern China gateways, but is nonetheless unwelcome.

To read on, visit China Southern 2018: Leaving SkyTeam Alliance becomes an option, but where to next?

 

Uzbekistan aviation market: Central Asian tourism booms, promising rapid growth

Uzbekistan’s aviation market is being transformed as the nation adopts new liberal policies and starts to focus more on tourism. Uzbekistan has been drastically underserved by aviation for years, and is poised for rapid passenger growth, benefitting the economy, its flag carrier and several foreign airlines.

Uzbekistan is the largest country in Central Asia, with a population of 32 million, but has a relatively small aviation market, given its size. In 2017, there were only 3.7 million international seats to and from Uzbekistan, and less than 1 million domestic seats, according to CAPA and OAG data.

Kazakhstan, the second largest country in Central Asia by population (but bigger in terms of GDP), has more than three times as many seats. Kazakhstan’s s aviation market has grown rapidly over the past several years, whereas the Uzbekistan market has experienced virtually no growth at all.

To read on, visit Uzbekistan aviation market: Central Asian tourism booms, promising rapid growth

 

Philippines turboprop fleet expands rapidly, leading to more than 20 new point-to-point routes

The Philippines has emerged as a large growth market for turboprop manufacturers as airlines respond to surging demand for regional services, and congestion at Manila, by launching new point-to-point routes. The number of turboprops operated on scheduled services in the Philippines increased by 57% in 2017, from 21 to 33 aircraft.

There are now over 50 domestic routes in the Philippines operated by turboprop aircraft, compared to less than 30 routes 15 months ago. Philippine Airlines’ (PAL) regional subsidiary, PAL Express, added 16 turboprop routes in 2017, and the Cebu Pacific turboprop subsidiary Cebgo has added 23 routes since Nov-2016.

The Philippines’ two main airline groups have been using their fast-expanding turboprop fleets to launch point-to-point routes that bypass congested Manila. The new routes enable Cebu Pacific and PAL to continue expanding in the domestic market despite the constraints precluding growth at Manila, while at the same time meeting surging demand for domestic point-to-point services as the Philippines economy grows rapidly.

To read on, visit Philippines turboprop fleet expands rapidly, leading to more than 20 new point-to-point routes